Cooking Gas (LPG) price rises again in Nigeria

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• Author: Muyiwa Ige(LPG Stakeholder and Consultant)

The sustained lowering of the retail prices of cooking gas across the country in the past few months, which was received with euphoria and great relief by the good people of Nigeria, appears to have come to an abrupt end, if the recent LPG depot pricing pattern, is anything to go by.

The ex-depot price of 20 Metric Tons of LPG – which was as low as N9,000,000 just a month ago, initially increased to N9,400,000, and has been on the upward territory since then; the price currently ranges between N10,500,000 – N11,000,000, at the LPG Depots(Terminals) in Lagos, Port-Harcourt, Oghara, Kwale and Warri.

Factors attributable to this recent hike in the price of LPG (Cooking Gas) in the country, include an increase in the demand for the product - which has outpaced its domestic supply, a rise in the international price of LPG and unfavorable forex rates( which makes the landing cost of imported LPG cargoes high.)

The seasonal increase in the demand for LPG in the country during the current raining season when outdoor cooking with firewood/charcoal is quite unfavorable, makes it necessary for LPG marketers to increase their volume of imported LPG cargoes, in the face of inadequate domestic supply.

The recent upward review of port charges, VAT on imported LPG cargoes, coupled with the freight cost of imported LPG cargoes, have all combined to make the landing cost of imported LPG to rise sharply, which is being invariably passed on to LPG consumers in the form of higher retail price of the product.

The lasting solution to the aforementioned problem is a consistent increase in the in-country production of LPG.

With a handful of LPG Processing Plant Projects currently underway and some others in the pipeline, Niglpgas.com firmly believes the country will achieve self-sufficiency in domestic LPG production and supply within 5-8 years.