Impact of Naira Redesign/Cashless Policy On Nigeria’s Cooking Gas Industry

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  • Author: Muyiwa Ige(LPG Stakeholder and Consultant)

It is very apparent to all that the new Naira Redesign Policy of the Government is having an unfavorable impact on businesses, in a cash dependent country like Nigeria.

 

Nigeria’s LPG industry, which was already experiencing stunted growth as a result of high prices of cooking gas, has been further dealt a big blow with the implementation of the cashless policy.

 

New Naira Notes – the new Gold

The acute scarcity of the new Naira notes,  has made Nigerians very frugal with its spending.

Nigerians now prioritize their needs, with food, shelter, health and transportation, occupying top positions on their priority needs.

 

With the unavailability of Naira notes(new and old), LPG(Cooking Gas) is no longer a top priority of most Nigerians, most especially those that are in the outskirts of major cities, and the inhabitants of small towns and villages; who do not have pre-paid meters, and have access to cheaper alternative sources of cooking fuel.

 

Alternatives to Cooking Gas

Since there are cheaper alternative energy sources for cooking such as public power, firewood (which is abundant and cheap during the current dry season) and charcoal, Nigerians who have limited or no cash can afford to do without Cooking Gas.

 

They would rather deploy the cash they would have used to buy the “very expensive” cooking gas to purchase other pressing needs like food and shelter.

 

Poor Online Banking Services

Glitches in inter-bank money transfers have made many Nigerians wary of using the services, especially when they are in a hurry.

There have been reported cases where some bank transfers took several hours or days, to be delivered to the receiving party.

In these cases, the cooking gas purchased will be withheld until the customer’s transferred funds are received; which could take several hours or days.

This unfortunate trend is discouraging many LPG users and making them to turn to public power for their cooking.

 

Decreasing LPG Demand

All these factors are contributing to decreasing patronage at the nation’s LPG Terminals and Refilling Plants.

 

Solution

The release of more Naira notes into the circulation will encourage more LPG users to purchase the product.

Also, a major improvement in online banking services will stir up a substantial percentage of LPG users to avail themselves of that mode of payment to purchase cooking gas.