Nigerian households are facing difficult times as they spent about a quarter (24.4%) of the country’s monthly minimum wage (N30,000) to refill a 12.5kg cylinder of Liquefied Petroleum Gas (cooking gas), a BusinessDay analysis shows.
In December 2021, the price of cooking gas increased by 75 percent year-on-year to N7,332.0 from N4,154.3 in December 2020, according to the December 2021 Cooking Gas Watch report by the National Bureau of Statistics (NBS).
Further analysis shows that the 24.4 percent share of minimum wage spent on cooking gas is 10 percentage points higher than 14 percent spent only two years ago.
Analysts say the rising prices of cooking gas are already putting pressure on consumers as it is a critical household item.
“The fact that gas has become more expensive means consumers will reduce their allocation to other spending items just to sustain their gas consumption,” says Ayorinde Akinloye, a consumer analyst at United Capital plc.
Similarly, Moses Ojo, a Lagos-based economic analyst, notes that the well-being of consumers is gradually being eroded by the high cost, making them source alternatives like charcoal, firewood, and kerosene.
Although health and climate experts discourage the use of firewood, the rise in the cost of cooking gas since the beginning of last year is straining already stretched consumers dealing with rising general prices and low income.
In December, the headline inflation rate rose to 1.8 percent month-on-month, the worst since May 2017, as food prices jumped 2.2 percent to compound consumers’ misery.
“Many of us can’t buy cooking gas anymore; the government should do something about it. The price keeps increasing every day,” Aina Babatunde, a taxi driver, says. Babatunde is one of many Nigerians to jettison his gas cooker for a charcoal stove.
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Others like Deborah Okowe, a mother of two children, adopted austere measures like replacing their gas cylinders with smaller ones than they would normally use.
Experts blame the price hike on the dearth of infrastructure, a global shortfall in gas supply, inadequate local production, shortage of foreign exchange, devaluation of the naira, and logistic hitches.
Worse, cooking gas might become more expensive as some LPG distributors tell BusinessDay that a hike in price is expected to continue this year.
“The soaring cooking gas prices may continue till March next year as winter in Europe will increase the demand for natural gas for heating,” notes Emmanuel Uwandu, founder of GAS360, a local gas distributor.
Likewise, Ogboji Sunday, a sales representative at Sungas Company Limited, says it is possible for the price to increase till January based on the current challenges the sector is facing.
Last month, the Nigerian National Petroleum Corporation (NNPC) announced that the corporation was currently working towards increasing the supply of cooking gas to reduce its rising price.
“What we are doing is to increase supply. Once the supply is increased the prices will come down,” said Mele Kyari, GMD, NNPC, assuring that the government had set in to guarantee supply and support gas companies in the country.
