Surge in cooking gas prices artificial, exploitative – NALPGAM President
The recent surge in the price of cooking gas has raised concerns among Nigerians. Prices which previously averaged between ₦1,200 and ₦1,300 per kilogram, have risen to between ₦1,700 and ₦2,000, and as high as ₦3,000 in some areas, according to recent reports.
The Nigerian Association of Liquefied Petroleum Gas Marketers (NALPGAM) has however attributed the price surge to temporary supply disruptions and exploitation by some operators in the market.
NALPGAM National President, Oladapo Olatunbosun, made the assertion on Wednesday while speaking on Channels Television, stating that there was no official increment in the price of Liquefied Petroleum Gas (LPG).
He noted that some marketers took undue advantage of the supply gaps caused by the recent strike by the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN).
“I sympathize with Nigerians as the President of NALPGAM because we never intended to have a situation like this. I must say it categorically that prices of cooking gas have not gone up. No increment has been done officially.
“What is happening is that some marketers are taking advantage of the shortage in supply and the market forces that have increased demand. They are cashing up to make good money, which is wrong.
“We frown at this as an Association, and I’m happy that by the grace of God, normalcy will return in the next few days,” Olatunbosun explained.
The NALPGAM President stated that while normal supply and pricing were expected to stabilize soon, the current crisis was artificial and temporary.
He added that the recent strike as well as the maintenance and renovation of facilities embarked upon by Dangote Refinery which slowed truck loading, also complicated the situation.
Olatunbosun noted: “Before the strike, when you load from Dangote, he sends out about 50 trucks per day, which is good because it served the South West and some part of the North well, and if you add it to what you get from Apapa, and other depots in Lagos, because they also source their products from IOCs and other producers.
“Dangote came in with his own strategy, selling directly to offtakers. That made importation not to be attractive. You won’t be able to compete if you import because you are likely to incur losses.
“But at a time, Dangote also commenced renovation and maintenance, which affected loading. Trucks started spending like 14 days at Dangote yard before they could get products. So, marketers switched to Apapa, and nobody felt the impact.”
He added: “When Dangote finished renovation, and we were about to commence full loading, the strike came in. Although Dangote didn’t stop production, everybody had rushed to Apapa, and it was now out of product, and all the depots there were dry.
“The only vessel that came in from NOJ axes was meant to supply three depots but could not berth because of the strike. And even when it berthed, the officers to inspect it weren’t on the ground because of the strike, and that caused about five days’ loss, and the real impact of the backlog became obvious.”
He further noted that the increase witnessed in the country’s LPG consumption also affect supply during such disruptions, while advising consumers to buy directly from registered gas plants, as those buying through third parties were likely to pay higher.
According to him, “If you buy a product from a third party, fourth party, the chain has been extended, then the price is going up, which is quite illegal. Just like you buy petrol on the road for people who carry kegs, they will sell it at exorbitant prices. So, if you go to gas plants, the price you can buy today is ₦1,300 maximum.
“People who are claiming to buy gas at ₦1,700 did not disclose the source of their purchase. If you are buying from a third or fourth party…the prices increase.
“But if you buy from gas bottling plants, my members, you will not buy as high as that. Average price within my members in south-west today is between ₦1,000 to maximum of ₦1,300, depending on the location and the kind of overhead they incur to get the gas into the plant.
“Before this artificial scarcity, the prices were being sold at ₦1,050, and in some places, ₦950. So, the highest you could get from a gas plant today is ₦1,300, depending on if it’s a very remote area.”
