Why Scarcity of Cooking Gas May Linger In Lagos, Delta, Northern States

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By NIYI JACOBS

Cooking gas (Liquefied Petroleum Gas, LPG) has become a scarce commodity in Lagos, the state where it is most consumed, as well as in Delta, and up North in Kano, Kaduna, Katsina, and Sokoto. But there is no scarcity in Abuja and Kwara.

The retail price jumped 66 per cent in October as the depot price of 20 metric tonnes (mt) rose from N10 million at the beginning of the month to N16 million at the end, despite the Nigerian Liquefied Natural Gas Limited (NLNG) supplying 20 mt at N9 million.

A 12.5kg of cooking gas refill now sells for between N13,500 and N14,000 in the black market.

Traders complain gas plant owners sell at between N1,100 and N1,200 per 1kg as they cannot access enough quantity.

A 12.5kg refill goes for between N13,500 and N14,000 in the black market, up from N8,700 in June and N10,200 in September.

Nigerian Association of Liquefied Petroleum Gas Marketers (NALPGM) President, Oladapo Olatunbosun, confirmed there is currently not enough cooking gas in Lagos.

“In my own gas plant, I sell at N950 per 1kg. So, by all means, the masses should try not to patronise those that don’t have gas plants because they will also add their profit. Those people are also part of the problem we are facing in the country,” he said.

No scarcity in Abuja, Kwara

In Delta, cooking gas costs N1,100 per 1kg refill in Warri and Effurun, up from  N800  in October in both cities.

It costs N1,400 per 1kg refill in Katsina, between N850 and N950 in Kano, and N5,500 per 5kg refill in Sokoto.

There is no cooking gas scarcity in Abuja and Kwara but the price remains high.

 “So for me, the problem I’m having is it liquefies. So instead of having the normal gas, you end up with like 70 per cent gas, and 30 per cent liquid that’s inside the cylinder, for whatever you buy,” Roy, a resident of Karu, Abuja told The PUNCH.

“Initially we were not even aware, until we noticed that when we shake the cylinder, it’s always leaving the liquefied part under. So it ends within like two or three weeks before the normal period when it should last.”

Sandra, another resident of the area, confirmed there is no scarcity of cooking gas, but it has become costlier.

 “I bought gas today at Abacha Road in Mararaba. 12.5kg for N13,500. I wouldn’t say there is scarcity, just that it has become expensive”, she said.

Kubwa resident Cecilia reiterated “it’s not scarce in my area, there’s just a price increase. I bought last Wednesday at N1,000 per kg. Plus it doesn’t last as long as it used to.”

Cooking gas is available in most filling stations in Kwara.

Sunday Oladele, a dealer in the Gaa Odota axis of Ilorin, said: “Cooking gas is available in Kwara State. I have it in my outlet which I sell at N1,200 per kg.

“We have not experienced scarcity in Kwara. There is also gas at Ogbomoso in Oyo State where I have another outlet and it is being sold at N1,100 per kg.”

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NLNGL supplies 70% of market

The NLNGL supplies 70 per cent of the national cooking gas market, according to Olatunbosun, Nigeria is said to be the fastest growing LPG market in the world, with a projected size of $10 billion, as the annual per capita consumption of LPG grew from 1.8kg in 2015 to 5kg in 2021.

Petroleum Products Pricing Regulatory Agency (PPPRA) data shows cooking gas domestic consumption exceeded 1 million mt in 2020, the first year it reached the 1 million mt threshold.

“As a matter of fact, prices would have further exploded more than they are now if not for the noise that we have been making. But prices are beginning to reduce at standard gas plants.

“It shouldn’t be more than N1,000 per 1kg, and it will continue to go down,” Olatunbosun enthused.

Abuja directs NMDPRA to restore market sanity

An industry source disclosed “the federal government summoned the NMDPRA [Nigerian Midstream and Downstream Petroleum Regulatory Authority] in October and reinstated its mandate at bringing sanity to the market.

“So, all things being equal, prices of cooking gas would begin to come down any moment [from now].”

Olatunbosun had warned in September the price of 12.5kg cooking gas refill could rise to N18,000 by December unless Abuja acts.

He said: “There is a ridiculous hike in gas prices going on right now, and I am afraid that if the federal government does not step in to checkmate the activities of these terminal owners, prices could reach as high as N18 million per metric tonne by December. This means that a 12.5kg could go as high as N18,000.

“Terminal owners are hiding under the guise of high foreign exchange to increase price to further increase the suffering of the masses. There is no justification for the increment.”

Terminal owners denied the allegation and blamed the rising prices on foreign exchange and increasing prices of crude oil at the international market.

 Meanwhile, Abuja has made $1 billion from gas sale to Portugal this year alone and anticipates more hard currency at the completion of the Trans Sahara Gas Pipeline (TSGP) stretching from Nigeria across Niger to Algeria and anchoring in Spain.

Nigerian National Petroleum Company (NNPC) Chief Executive Officer Mele Kyari disclosed the sale in Portugal when he accompanied President Muhammadu Buhari to visit the country.

 “President Muhammadu Buhari is on a state visit to Portugal for the second United Nations Ocean Conference.

“On the sidelines of the event, President Muhammadu Buhari is leading a high-level Nigerian business delegation to the Nigeria-Portugal Business & Trade Forum.

“On the President’s delegation is the CEO NNPC Ltd, Mallam Mele Kyari, who highlighted the age-long energy partnership between the two countries, stressing that Nigeria supplies 70 per cent of energy imports to the European nation.

“This year alone, we have sold over a billion dollar worth of natural gas to Portugal,” the NNPC said on its Twitter handle, per reporting by The PUNCH.

Kyari said at the forum there are ample opportunities to grow energy supply to Portugal as Nigeria has invested in infrastructure to ensure domestic gas availability and increase supply to the international market.

Nigeria has been supplying gas to Portugal for decades and wants to be an alternative natural gas source for the larger Europe which seeks to break its reliance on Russian gas.

Petroleum Minister of State Timipré Sylva disclosed this at a meeting of the TSGP partners in Abuja in June.

He said Nigeria alongside Niger and Algeria are committed to the project which will bring Nigerian gas closer to the European market facing high energy prices stoked by the Russian war in Ukraine.

 “The project takes our gas to the European market directly. Today a lot of gas in Nigeria is stranded or re-injected because there are no infrastructure to take the gas to the market.

“This project is going to take the gas all the way from where it is produced to the European market, and it cannot be a better time, because gas prices are quite firm at this point,” Sylva said.

“I believe that it is a very good time for us to take advantage of very high gas prices globally.”

It will also enable other countries to benefit, including Chad which is also not far from the corridor of the project, he added.

“So this project has a lot of potential for growing the economies of African countries, West African countries and North Africa.”