Cooking gas price in Nigeria will rise further in the approach to Christmas following a widening gap between supply and demand, the depreciation in the value of the local currency as well as new charges imposed by the federal government on imported gas, the association of liquefied gas markets said Thursday.
In addition, to this, the vast increase of the price of gas on the global market is also impacting gas prices in Nigeria where up to 40 per cent of consumption is being met by imported gas from countries like Algeria and the Central African Republic.
Cooking gas storage tanks are drying up across Nigeria and the depreciation of the local currency means that fewer marketers are now able to import gas, intensifying the crisis.
Mr Olatunbosun Oladapo, president of the marketers association said the federal government must now intervene by suspending the new charges on imported gas and also by incentivising investors to go into exploration and production of gas in Nigeria to plug the shortfall in supply.
A 12.5KG cylinder of cooking gas today sells for near N10,000 with marketers buying a 20MT tank of gas at N11.6m up from the N3.8m for which the same tank of gas was bought in January this year.
Mr Oladapo said members of his association were abandoning the business with some selling off their gas plants and leaving the business because of falling margin.
According to him, marketers no longer make more than N500,000 in gross margin from a total sale of N12m because of crisis that is now plaguing the cooking gas supply business in Nigeria.
He also said housewives were beginning to take to the use of firewood for cooking with the inherent health issues like glaucoma and lung infection.
Nigeria’s local production of cooking gas is estimated at 600,000 but efforts to draw Nigerians to the use of gas means that demand is today about twice that level and the planned intervention by the Nigerian Liquefied Natural Gas Limited via its train seven will not materialise in five years.
