The demand for Liquefied Petroleum Gas or cooking gas has fallen nationwide over rising cost of living despite several interventions by the Federal Government to ramp up supply and boost local consumption.
Information gathered countrywide from retailers at the weekend revealed that demand for cooking gas fell due to rising inflation rate, resulting in low purchasing power of consumers.
Also, signs are rife that the price may rise much higher as Nigerians have expressed their displeasure with the continuous rise in the cost of the product and other commodities.
Consumers are lamenting the hike in gas complaining that cooking gas was becoming a product of the elites and out of reach for the common man.
Industry operators have also blamed the fast-eroding value of the naira and the exchange rate fluctuation for the sharp rise in the cost, while the operating cost of business keeps rising with the exchange rate.
The Nigerian Bureau of Statistics had on Thursday, announced that the inflation rate rose from 28 per cent in December to 29.90 per cent in January.
The NBS revealed that Nigeria’s average price for refilling a 5kg cooking gas cylinder hit N4, 828.18 in November 2023. This represented a 5.82 per cent increase compared to the N4, 562.51 average price recorded in October 2023, while on a year-on-year basis, cooking gas prices increased by 6.13 per cent from N4, 549.14 in November 2022.
Market survey revealed that the price of 1kg of cooking gas has since risen from N1000 in January to around N1200 depending on the area.
Two 20 tons of LPG vessels owned by the Nigerian Liquefied Natural Gas Limited discharged the products at the Lagos port on Friday at a landing cost of N21 million each. This brings the landing cost of 1kg to about N1000.
The price was around N16 million per 20 tons as of December, 2023.
Middlemen now sell a 20-ton vessel of cooking gas at between N22 million and N23 million, further compounding the plight of retailers who have to pass the high prices down to consumers.
“The looming threat of cooking gas becoming a luxury item raises concerns about its accessibility to average Nigerians and its impact on their daily lives.”
President of the Nigerian Association of Petroleum and Gas Marketers, Dapo Olatunbosun, said that prices are now being controlled by rising inflation and market forces, unlike last year when prices were influenced by middlemen.
“NLNG’s supplies have been consistent, and middlemen haven’t been able to influence prices like before because we have not been keeping quiet. It could have been worse if we had not spoken up,” he said.
The development comes on the heels of Olatunbosun’s earlier outcry that the price of a 12.5kg cylinder of cooking gas could hit N18, 000 as of December 2023 if the government did not wade into continuous price hikes by middlemen.
“We now have mixed supplies both from importation by independent marketers and NLNG, but supplies are dominated by NLNG,” he said.
A market survey carried out by THE POINT revealed that as of the beginning of October 2023, the price of 20 metric tons at the terminal had moved from N10 million to N16 million, representing a 66 percent rise in price within the space of one month.
Depot owners had blamed the sharp increase on depreciation in foreign exchange and increase in price at the international market.
However, outcry by gas retailers resulted in the Federal Government summoning the Nigerian Midstream and Downstream Petroleum Regulatory Authority to an emergency meeting.
This recent surge will further squeeze cash-strapped consumers, erode their purchasing ability and amplify a cost of living crisis in Nigeria.
In January, food prices soared as food inflation reached an all-time high of 35.41 percent, rising by 1.48 percent from 33.93 percent in December 2023.
Month on Month, food inflation increased to 3.21 percent in January 2024; 0.49 percent higher than 2.72 percent recorded in December 2023.
According to data published by the NBS on Thursday, the rise in food inflation was caused by increases in prices of Bread and cereals, Potatoes, Yam and other Tubers, Oil and fat, Fish, Meat, Fruit, Coffee, Tea, and Cocoa.
On a month-on-month basis, the Food inflation rate settled at 3.21 percent, relative to the 2.72 percent m/m in December 2023.
Real wages, which reflect the power of employee pay after accounting for inflation, have fallen in Nigeria by 200 percent, thus making Nigerians face increasing pressures daily and forcing them to make hard choices as prices of all products continue to rise.
For lower-income households with little or no cash cushion, they are making harder choices such as what to buy or not.
Sixty-three percent of Nigerians – 133 million Nigerians – are multidimensionally poor – meaning that two in three people are poor and experience just over one-quarter of deprivation such as health, the standard of living, and work, according to a recent report by the NBS.
The World Bank, in its latest Nigeria Development Update report for June 2023, said the loss of purchasing power from high inflation has increased poverty in the short term, pushing an estimated four million Nigerians into poverty between January and May 2023.
The global bank estimates based on the NBS data show that 89.8 million Nigerians fell below the poverty line at the start of 2023, with an additional four million making it 93.8 million in May of 2023.
The looming threat of cooking gas becoming a luxury item raises concerns about its accessibility to average Nigerians and its impact on their daily lives.
With the rising costs, many are left with limited cooking options, posing challenges for households nationwide.
Hence, it seems the alternative cooking fuel, such as, firewood and charcoal may be the only option available to millions of households in Nigeria.
We appeal to the Federal Government to prioritise the domestication and penetration of LPG and implement measures to significantly reduce the price of cooking gas for Nigerians by ensuring that it becomes more accessible, available and affordable for the common man.
