Nigerians Groan Over Price Of Cooking Gas; NALPGAM Blame VAT, Custom Duties

By Akinwale Kasali

For an average Nigerian, the easiest and fastest way of Cooking meals is the use of cooking gas.

Sadly, this has become impossible due to the hike in price.

Femi Abdusalam, a resident in Lagos State lamented the hike in the price, stressing that few months back, 12.5kg cylinder was sold between N4,800 to N5,300, but it increased to N8,000-N8,500 in less than two months.

Also, Regina Azubuike, said that the hike in the price of cooking gas was quite alarming, especially given the fact that no reason had been given for the increase.

Azubuike added that the increase has further compounded the hardship of Nigerians as many would now turn to using firewood and charcoal for cooking.

“Cooking with firewood is dangerous to the health, but with the economic situation and the non availability of resources to purchase cooking gas, that is the only alternative available”, she lamented.

Another resident, Bunmi Ajisafe, a trader, expressed worry over the continuous increase in the price of cooking gas, noting that the hike had further worsened the economy of her family.

Ajisafe said she was surprised at the astronomical increase in the price of commodities these days, not only gas.

”It is so frustrating that you are not sure of the next price you would meet when you go to the market. I am really worried and surprised. I thought Nigeria is a country with an abundance of gas,” she said.

She appealed to the Federal Government to urgently intervene, otherwise, she may have to return to the use of a kerosene stove, charcoal or firewood.

Tope Ogunfowokan, said that Nigerians were yet to recover from the hardship brought on by COVID-19 which crippled many businesses and rendered many people jobless, now there is hike in prices of Cooking Gas just like that of food commodities.

Ogunfowokan also said she remembered there was a time the Federal Government was campaigning for citizens to key into cooking with gas.

“Many people did nothing to that effect, but people gradually keyed into it. Then the present gas situation; it is frustrating and unimaginable and the Government should intervene,” she said.

The price of cooking gas in Nigeria has more than quadrupled, with importers of Liquefied Petroleum Gas, LPG, stopping the importation of the commodity, accruing this development to the high importation of the commodity which stands at about 65 per cent of LPG, while domestic production accounts for 35 per cent.

However, the Executive Secretary, Nigerian Association of Liquefied Petroleum Gas Marketers, NALPGAM, Bassey Essien, blamed the hike on the reintroduction of customs duty and Value Added Tax on imported LPG.

Essien said that these were the basic reasons for the halt in its imports by importers.

Making this statement on Monday, 8th November, 2021, he stated that there were several other issues, stressing that if the halt in LPG imports should drag further, the supply of the commodity domestically could suffer severe drop.

It would be recalled that NALPGAM had written an open letter to the Minister of State for Petroleum Resources,  Timipre Sylva, urging the Minister to urgently intervene in the skyrocketing price of LPG in Nigeria.

The open letter was signed by the National President, NALPGAM, Olatunbosun Oladapo, and Essien.

NALPGAM is the umbrella body of operators of LPG bottling plants licensed by the statutorily empowered government agencies to carry out the business of safe bottling of cooking gas.

Essien also stated that due to the fears expressed by importers who had stopped importation of LPG into the country, cooking gas sourced from the Nigeria Liquefied Natural Gas company was now selling in the region of N11 Million per 20 metric tonnes truck. This, he said, was with a cumulative daily increase of N300,000 to N500,000 per 20MT truck without the imposition of VAT and customs duties.

“The NLNG supplies LPG to the terminals and these terminals sell to the marketers and at times in a day, the price can go up by about three times.

“Take for example, I was granting an interview on Saturday morning on this same issue and that morning some terminals were selling for N11.6m to N11.7m, but as I stepped out of the interview, it had increased to N12m.

“And the annoying part is that since about a week or two now, nobody has been importing gas because of the issues with customs and VAT. And this is because since the position on these issues have not been clearly stated, importers have to pause.

“The customs is even clamping down on importers and so they cannot import anything, which means that the product in circulation across the country is from the NLNG.

“But when there are issues like this, some unscrupulous people will want to capitalise on the situation, which they are doing, because right now, from what we’ve got, the price at which NLNG product gets to Lagos is about N7m, but you get it at N11m and above. On the price increase, the association stated that despite the decade of gas policy and measures by government, the cost of cooking gas had continued to rise.

“Despite the strategies employed by the government with its anticipated benefits, the reverse seems to be the case with the bulk of LPG consumed in the country largely imported.

“The availability of the product for domestic consumption has been skewed majorly to 65 per cent import dependence while only 35 per cent has been attributed to local supply.

“The obvious devaluation of the local currency, inability to access foreign exchange by importers, the increasing international price against which the cost of domestic LPG is indexed as well as the anticipated re-imposition of VAT and customs duties with retrospective application have all contrived to push the price of LPG upward”, Essien explained.

He stressed further that , “It has been observed that the above factors have seriously increased the price of gas to the extent that a 12.5kg gas which sold for N3,000.00 in January, 2021, now sells for between N10,000 to N10,200, depending on area of the country.

“The daily galloping price of gas if not properly handled may derail the lofty ideals of the gas expansion plans of the government as well as the job opportunities the programmes were intended to create.” The association stated that the price of LPG had exponentially skyrocketed over the last few months.

He said the cost of 20MT of LPG as of January 2020 was N3.4m, but by December 2020, it had gone up to N5.4m; N5.6m in January, 2021, N6m in February, 2021 and N11m in October, 2021 without any signs of abatement. Officials at the Federal Ministry of Petroleum Resources and the Nigerian National Petroleum Company Limited promised to revert when contacted.

It would be recalled that Sylva, had in August this year described LPG as a deregulated product and stated that government could not determine its price, but promised to meet with marketers on concerns about the persistent price hike.