TheCable

The Nigerian Association of Liquefied Petroleum Gas Marketers (NALPGAM) has attributed the hike in the price of cooking gas to fluctuations in the exchange rate, multiple taxes, and the scarcity of foreign exchange.

Bassey Essein, executive secretary of NALPGAM, spoke on Sunday in an interview with NAN.

In its latest report on liquefied natural gas (LPG) prices, the National Bureau of Statistics (NBS), had said the average retail price for refilling a 12.5 kilogramme (kg) cylinder of cooking gas declined by 0.23 percent from N10,277.17 in January 2023 to N10,253.39 in February 2023.

On the other hand, the agency said average retail price for refilling a 5kg cylinder of LPG increased by 0.26 percent from N4,588.75 recorded in January 2023 to N4,600.57 in February 2023.

Speaking on the price increase, Essein said marketers’ inability to frequently import LPG to boost domestic supply, was a challenge. 

He said while the price of cooking gas was still high, it has remained stable since the beginning of the year, compared to the price last year.

“The source of LPG, for some time now, has been predominantly from the Nigeria LNG and has never met the demands,” he said.

“This is because of the supply-demand gap and market dynamics. All these work in concert to affect the price. Hence, the price goes up.

“The inability to import LPG as frequently as before and to augment the inadequate domestic supply is due to major factors [like] FX, exchange rate, and taxes.”

Recommending some solutions, Essein called for more investment in the gas processing sector in the country, urging the federal government to grant necessary “incentives that attract investors”.

He also asked the government to “remove taxes and tariffs on gas”. 

“The penalty for gas flaring l learnt has been increased. Maybe it will work because if a company recognises the penalties paid on these, it might encourage the worthwhile investment in gas processing.” Essein said.

On his part, Oladapo Olatunbosun, NALPGAM president, advised the government to create incentives to encourage exploration.

Olatunbosun said foreign and local investors could be encouraged to explore and invest more in the gas business.

He added that such investments are necessary because Nigeria has an abundant supply in the soil and under water; as well as the needed storage facilities.

“The price is coming down gradually. The only solution to bring price down significantly is to improve on supply,” he said.

“Mark you, inflation affects all pricing. We should also know that the value of our currency is a factor.

“Why price is a major issue is because the purchasing power of the masses is low.

“As a country, we should plan for increasing the local supply through exploration.”