Business - Business & Economy - News - Oil & Gas - September 16, 2021

Why cooking gas price soars, despite PPPRA’s supply of 85,265MT in August

The current price of the commodity ranges from N5,050 and N7,000 per 12.5 kg cylinder

MEDIATRACNET

Despite reports by the Petroleum Products Pricing Regulatory Agency (PPPRA) that its supplied a total of 85,264.803 metric tonnes (MT) of liquefied petroleum gas (LPG), otherwise called cooking gas, in August 2021, the retail price of the commodity has continued to rise, a review of the market has shown.

The PPPRA said apart from about 38,040.457 MT of LPG sourced locally by eight operators, another 47,224.346 MT was imported by seven companies.

The eight operators that facilitated the supply of the first volume of LPG in the country include Ever Oil, Stockgap, NIPCO, 11 plc, Greenville Natural Gas, PNG Gas Ltd, NPDC and Ashtavinayak Hydrocarbon Ltd.

The seven companies involved in the importation of the commodity during the month include NIPCO, Matrix Energy, Algasco, Techno Oil, Prudent, A.A Rano, and Stockgap.

Additional analysis of the data on importation in the month of August showed that 21,606.301 MT was imported from the USA, while 13,044.266 was imported from Algeria and 12,573.779 MT was brought into the country from Equatorial Guinea.

The volume of LPG supplied in August suggests a decrease of about 21,959.781 MT compared to the 107,224.584 MT supplied in the month of July. In addition, 102,787.234MT was also supplied in June.

On the other hand, out of the 38,040.457 MT sourced locally, 7,042.058 MT was sourced by Ever oil, 9,429.761 MT by Stockgap, 7,687.112 MT by NIPCO, 4,761.626 MT by 11 plc and 440.380 MT by Greenville Rumuji, River State.

Also, PNG Gas Ltd in Ebedei, Delta State supplied 651.490 MT into the market, while NPDC, Oredo, Benin State provided 1,055.310 MT and Ashtavinayak Hydrocarbon Ltd Kwale, Delta State, discharged 6,972.720MT.

Similarly, 11,262.04MT of propane was sourced locally and supplied into the energy market by Nigerian Petroleum Development Company (NPDC) and Ashtavinayak Hydrocarbon.

Regardless, the price of the commodity has continued to soar in the market, as the volume available has been inadequate to meet the demand of most households.

Operators said on Thursday the activities of the Nigeria Customs Service at the port have limited the volume of gas imported into the country, allowing consumers to rely on the volume of gas supplied locally by the Nigeria LNG for the domestic market.

In clarifying its role in the domestic LPG supply chain , the NLNG said it resolved to increase the volume of its annual commitment to the Nigerian market from 350,000 metric tons to 450,000.
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The clarification became necessary following insinuations that the company was responsible for the current scarcity of LPG, which resulted in the hike in the price of the commodity in the domestic LPG market.

Following the scarcity, the price of cooking gas increased from N4.80 per 12.5 kilogramme cylinder to over N7000, a development the NLNG said was as a result of a combination of several market factors, including the forces of demand and supply.

But an operator who spoke with our reporter in Abuja on condition of anonymity blamed the crisis and scarcity on the activities of the Nigeria Customs Service.

The operator who requested that his names should not be revealed due to the sensitivity of the matter said Custom officials have been demanding for the payment of value-added tax (VAT) and import duties from owners of vessels importing LPG into the country.

Besides, he said the current foreign exchange crisis is also taking its toll on the import programmes of most of the companies, as most of them cannot afford to source for dollars at the prevailing high rate in the black market to continue the import.

“The natural recourse is for most of the importer to opt-out and allow the NLNG and those who can afford to do it,” he said.

A review of the current prices in the gas market showed the refill of a 12.5kg cylinder of cooking gas in Abuja is about N5,050.00, from the previous N4,200, while Gombe is N5,000 and Kogi N4,985.
In Lagos and Ogun States, the price of the same volume of the commodity is between N6,500 and N7,000.

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