By Adewale Sanyaolu
It was a rude shock for consumers of Liquefied Natural Gas (LPG), popularly called cooking gas at the weekend as the price of a 12.5 kilogrammes of the commodity was hiked from N12,000 to N14,000.
According to industry observers, the hike was as a result of soaring exchange rate which currently stands at $1 to N1,500. This was as industry operators warned that the price of 12.5 kg could rise to as much as N16,000 this week.
Some of the consumers who spoke to Daily Sun expressed shock at the price increase, saying as at last Friday, a 12.5 kilogramme weight of the product was sold for N12,000.
The consumers in separate interviews said cooking gas was becoming out of the reach of the common man and now an elitist product.
They said if the trend continues most homes would not be able to afford the commodity, especially in the face of weak purchasing power of Nigerians accentuated by weaker naira.
Former Chairman, Liquefied Petroleum Gas Retailers (LPGAR) branch of the National Union of Petroleum and Natural Gas Workers (NUPENG), Mr. Chika Umudu, in a telephone interview with Daily Sun, said cooking gas marketers have blamed the current hike on forex challenges.
Umudu said a larger volume of cooking gas was still being imported into the country, saying the LPG sector was not in anyway insulated from the foreign exchange volatilities.
He said as long as the country cannot domesticate its huge gas potential for local use, the local market will continue to be at the mercy of importers.
The former LPGAR alleged that some cabals within the LPG value chain have hijacked the sector with many making as much as 100 per cent profit margin.
Also speaking, the Managing Director of Tweety Nigeria Limited, marketers of LPG. Mr Shina Adebo, said the cooking gas business landscape has becoming toxic and frustrating.
He said as at 10-days ago, a 20 metric tonne of LPG sold for N16 million but as at the moment, he said same is selling for N21 million.
Adebo said the fast eroding value of the naira coupled with exchange rate fluctuation was responsible for the sharp rise in the cost of cooking gas.
He lamented that the operating cost of the business keeps rising as exchange rates soars, saying some of his colleagues are leaving the business for other trades.
The Minister of State for Petroleum Resources (Gas), Mr. Ekperikpo Ekpo, recently met with key stakeholders in the industry to find ways to lower the rising cost of cooking gas.
At the stakeholder consultation meeting in Abuja, Ekpo said he plans to reduce the cost of cooking gas and prioritise its adoption and penetration.
He said this was to ensure that the product becomes more widely available, reasonably priced, and accessible for the general public.
“The energy landscape is evolving rapidly, and the decisions we make today will profoundly impact generations to come. We must be strategic, innovative, and adaptable. This engagement provides us with an invaluable opportunity to gain insights into the diverse perspectives that shape our industry.”
Ekpo said he will intensify efforts to increase upstream gas production, to bridge the significant gas supply gaps which continue to hamper the strategic economic sectors.
“We will prioritise the domestication and penetration of LPG and implement measures to significantly reduce the price of cooking gas for our people, ensuring it becomes more accessible, available, and affordable for our citizens”.