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Why Prices of Cooking Gas are Skyrocketing in Nigeria

By Danlami Nasir Isah

Nigerians are currently reeling under the rising prices of cooking gas which are on the increase in the country. Cooking gas, otherwise known as the liquefied petroleum gas (LPG), is used for domestic purposes, not only in Nigeria, but also across the world.

In its August report from its website, the National Bureau of Statistics (NBS) disclosed that the price of refilling a 5kg cylinder of the LPG, has risen by 3.44 per cent month-on-month (m-o-m), and by 11.93 per cent year-on-year (y-o-y) to N2,215.33 in August from N2,141.59 in July.

The report said that states with the highest average price for refilling a 5kg cylinder of cooking gas were: Akwa Ibom, whose residents paid N3,025.45; Benue N2,825 and Jigawa N2,521.43.

It added that residents in Abuja paid the lowest average price per 5kg in August at N1,806. They were followed by Ondo State at N1,840.81 and Lagos State at N1,847.70.

“Similarly, the average price for refilling a 12.5kg cylinder for cooking gas increased by 2.09 per cent month-on-month, and by 9.14 per cent year-on-year to N4,514.82 in August from N4,422.32 in July.

“The surge in prices is even coming at a time where the country is faced with numerous economic and security challenges”

“States with the highest average price for refilling a 12.5kg cylinder for cooking gas were Abuja at N5,837.26, Kogi N5,237.50 and Ogun N5,170.83.

“States with the lowest average price for refilling a 12.5kg cylinder for cooking gas were Niger at N4,021.06, Kebbi N4,042.91 and Jigawa N4,079.26,” it added.

The surge in prices is even coming at a time where the country is faced with numerous economic and security challenges.

Speaking to Valuechain on the reason for the hike, a distributor assistant at Vine Gas, Utako District of Abuja, Micheal Musa, said that the rising cost of the importation of petroleum and natural gas products is regarded as a huge causative agent.

“When you look at the exchange rate, and how much it costs to import these products, and when you do the calculations to know what is going on. For instance, 6kg of gas, we usually refill at N2,000. But now, it has gone up to as high as N3,000, and in some places to N3,500 because the depot price has also increased by over 100 per cent,” he said. Musa also spoke about any likelihood of price reduction.

“I don’t see any chance of it reducing now. Nigerians are quick to blame us for price hike, and saying that we are insensitive – not knowing that we also feel the brunt. They should tell the government to do what is expected to do, so that the prices of these products will return to normal,” he added.

The Manager of Skywave Gas in Jabi District, Uche Ani, appealed to the Federal Government to come to the aid of Nigerians.

“Even myself, I am so disturbed by how things are going. If it continues like this, Nigerians may have to resort to using firewood to cook. The cost of loading and bringing a tanker of LPG from Lagos to Abuja is disturbing. Prices have skyrocketed, and we have to also adjust, because this is business, and we are here to make profits.

“We appeal to the government to lessen the sufferings of average Nigerians who are mostly users of LPG,” he appealed.

Also speaking to Valuechain, a resident of Jabi District of the Federal Capital Territory (FCT), Babagana Aliyu, who is married, with three children, could not hide his displeasure over the recent development.

“Those in the government are no longer sensitive to the plight of the poor, at all. I have a family and three children. Then, 12.5kg of gas, which we refill at N4,200 (before now), takes us for, at least, two months. But now, it is as high as N7,500, and it lasts barely a month. So, the price is increasing, and the value is decreasing. A situation, where we have an estimated 50 million average Nigerians using cooking gas, how do they want us to survive?” he lamented.

A trader at the Utako Market, Mrs. Ifeoma Christopher, however, opined that the hike in prices of cooking gas is manmade, and does not really reflect the true state of things.

“How can the prices of food items, gas and almost everything go up at the same time? Yes, I know that the economic downturn has caused a lot of uncertainties; but I believe that there are human factors attached to them. Nigerians can do anything to take advantage of a particular situation. I keep asking myself: what has changed that the prices of food items are increasing like this? But there is no answer to it. There may be a slight increase; but middlemen are inflating the prices,” she maintained.

Also, a civil servant, who is resident in Wuye District in Abuja, Mr. John Joseph, said that even civil servants are currently finding it difficult to survive the rising price of food items and other things. “For instance, in Nigeria today, you collect salary of let’s say N100,000. Before you say Jack, the money has finished, because even the naira now is not as valuable as before. We are in a difficult time, and even civil servants are looking for ways for other streams of income. This gas issue is one of the most surprising things to me. At least, if the price of petrol increases, and we are managing it, gas should not be part of it, because it is essential. I am optimistic, however, that things will get better soon,” he added.

Statistics have shown that Nigeria consumes about four million metric tons (MMT) of cooking gas annually, out of which 65 per cent of it is imported. As such, rising prices are imminent, since gas marketers have to source for scarce FX, as the ban of the Bureau de Change by the Central Bank of Nigeria (CBN) is still in place. Also, the Nigerian Liquefied Natural Gas (NLNG) allocated only 350,000 metric tons (MT) of gas to domestic consumption out of its 4MMT annual production.