One month after the federal government pledged to reduce the cost of Liquefied Petroleum Gas (LPG), commonly known as cooking gas, consumers are still grappling with high prices. Despite assurances from the Minister of State Petroleum Resources (Gas), Ekperikpe Ekpo, that efforts would be made to lower gas prices, investigations by Daily Trust reveal little progress in achieving affordability,Daily Trust reports.
The announcement of the government’s commitment to addressing the issue was made on November 26, 2023, in response to public concerns about rising gas prices. Ekpo’s spokesperson, Louis Ibah, attributed the surge in prices to challenges in sourcing forex for imports and insufficient supply to the domestic market by producers.
A committee was subsequently formed, headed by the CEO of the Nigerian Midstream Downstream Petroleum Regulatory Authority (NMDPRA), Farouk Ahmed, with a mandate to provide recommendations within a week on boosting supplies and reducing LPG prices. Despite the committee’s formation and the government’s granting of value-added tax (VAT) and import duty waivers to gas producers, the prices have not significantly decreased.
The current cost of a 12kg cooking gas cylinder ranges between N11,000 and N12,500 in different parts of Nigeria, posing financial challenges for households and small and medium-scale enterprises (SMEs). Many Nigerians had shifted to using cooking gas following the removal of the fuel subsidy in May 2023, converting power generators to gas for cost efficiency. However, the continued rise in gas prices has led to increased reliance on alternative fuels like charcoal and firewood.
Despite Nigeria’s abundant gas reserves, experts argue that clear policy direction and enforcement are needed to fully tap into this resource. The Gas Aggregation Company of Nigeria (GACN), established during the Buhari administration, was intended to drive natural gas utilization in the domestic market. However, little information has been heard about the GACN in recent times.
Gas prices remain high, ranging from N900 to N1,200 per kilogram, prompting concerns about the impact on the environment and sustainable energy usage. Some experts suggest that supply disruptions and insufficient gas for production contribute to the high costs. The President of the Nigerian Association of Liquefied Petroleum Gas Marketers (NALGAM), Oladapo Olatunbosun, acknowledges the government’s intervention but emphasizes the need for other stakeholders to play their part in reducing gas prices.
While the government’s palliative measures are expected to bring down prices, challenges such as vandalism of oil pipelines and the association of gas production with crude oil stability continue to pose hurdles in achieving gas production sufficiency and affordability.