by Chika Izuora and Sivowaku Abiodun
Consumers of Liquefied Petroleum. Gas (LPG), also called cooking gas, will soon have respite as key offtakers with a gas purchase agreement with the Nigerian Liquefied Natural Gas (NLNG) have intensified product loading to help prevent stockouts, which have led to recent price hikes.
Our correspondent gathered that NIPCO gas and 11Plc gas last Friday commenced offtaking of LPG from NLNG. Loading is also expected to heighten on Monday night (yesterday) to establish distribution connections across the market.
However, key industry operators in the Liquefied Petroleum Gas (LPG) industry expressed uncertainty about how long the price fluctuations of LPG or cooking gas will take.
A major LPG marketing association official who gave our correspondent an insight into the situation said the market is about to witness uncertainty due to several factors.
The official, like other stakeholders who spoke, said they do not want to be named.
In his explanation, he said, depot operators who had been involved in the product importation had lost huge amounts of resources when Dangote Refinery began LPG production that helped to crash the price.
He said the few days of protest by the oil sector union forced the refinery to halt further LPG production.
The situation became more worrisome because Dangote do not have storage capacity for LPG. After all, it is focused on refining petrol and aviation fuel.
However, a source within the major marketers said that stabilising supply may take until the coming weekend.
“LPG loading is not like petrol. We cannot load more than 25 trucks tonight because of safety issues and documentation. Still, now that the process is being intensified, most parts of Lagos and other South West states will see the price of the products significantly cheaper,” our source said.
Meanwhile, consumers, who spoke to our reporter, shared their experiences. One said: ‘My husband bought cooking gas for me at N2,000 per kilogramme.
Another person, who moved from a far distance to get at the gas at a cheaper rate, said, “I came all the way from Agege to this gas station in Ikeja because of the price difference. In most shops around Agege, 1 kilogramme of gas is sold for N2,500. But here, close to Oba-Akran, it’s N1,500. Before, we used to buy at N1,100. Now look at how much it costs.”
A senior official at a gas station in the Anifowoshe area of Oba-Akran, Ikeja,
Ajayi Abayomi, confirmed that their current selling price is N1,500 per kilogramme.
He attributed the sudden hike to supply challenges when asked about the reason behind it. “There’s no special reason other than limited supply,” he explained. “People couldn’t lift the product. The gas we’re selling now was diverted from our operations in Port Harcourt, Rivers State. We had to bring the truck down here to make sure our customers have something to use. We can’t afford to turn people away without gas,” he noted.
He further noted that, the station typically sourced gas from Dangote Petroleum Refinery & Petrochemicals or Apapa, but recent disruptions had complicated supply chains.
“Part of the price hike is linked to the issue between Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), and Dangote Refinery. The crisis affected operations in Apapa, where gas was supposed to be discharged. Because of the suspension, there was a disruption, and that contributed to the scarcity and price increase,” he pointed out.
The official added that, once Dangote Refinery was unable to sell gas, other suppliers quickly raised their prices. “We buy from these people, and we sell what we buy. That’s the reality. Before now, gas was less than N1,000 per kilogramme. Today, we’re selling at N1,500,” he emphasised.
LEADERSHIP recalls that, in January 2022, the NLNG committed to dedicating 100 per cent of its Butane (cooking gas) and Propane production to the Nigerian domestic market to boost availability, accessibility, and affordability of LPG, within the country.
This initiative, which began as a steady increase in volumes under the Domestic LPG (DLPG) scheme, aims to increase national LPG consumption, support the government’s “Decade of Gas” initiative, and reduce reliance on imported gas.
The NLNG now supplies all its Butane production to the Nigerian market, making it the highest single supplier of LPG domestically. The commitment was later expanded to include 100 per cent of its Propane production for use in cooking gas blending and other industrial applications.
The NLNG’s commitment to collaborating with stakeholders aims to maintain pricing stability and long-term market viability.
SOURCE: LEADERSHIP NEWS PAPER
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