• Friday, April 12, 2024
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Cost of refilling cooking gas gulps 40% of minimum wage

Cooking gas, kerosene prices skyrocket amid cost of living crisis

The cost of living for Nigerian households has worsened amid rising inflationary pressure as the amount it takes to refill a 12.5kg cooking gas is almost 40 percent of the N30,000 national minimum wage.

A survey by BusinessDay in Lagos shows that the cost of refilling a 12.5kg cylinder of cooking gas, a necessity for preparing meals, has gone up as high as N11,000 compared to N8,500 two months ago, an increase of about 29.4 percent.

“I refilled my 12.5kg gas cylinder for N11, 000 just four days ago after complaining it was expensive at N8, 500 the last time I got it, this is truly sad.” Muri Oladeji, a Lagos-based driver told BusinessDay.

Likewise, a banker who wishes to be only known as Frank noted that he initially went to Petrocam to refill his 12.5kg cylinder but he could not get it because this particular station’s POS network wasn’t down, and he didn’t have cash.

“It was priced for N9, 800 there but I wasn’t with cash and they were not accepting transfers, so I tried a smaller retailer and to my surprise the same 12.5kg was selling for N11, 400.”

Analysts say the rising price of cooking gas is putting pressure on cash-strapped consumers since it is a critical household item.

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“The wellbeing of consumers is gradually being eroded by the high cost, making them source alternatives like charcoal, firewood, and kerosene,” Moses Ojo, a Lagos-based economic analyst said.

On his part, Abiola Gbemisola, consumer analyst at FBNQuest said kerosene is the closest to gas but what is clear is that using gas is much more efficient. “Most people have actually switched from kerosene to gas. So, to cope with the rise in price, they will adjust by reducing the amount of gas that they use.”

The hike in cooking gas prices is on the back of the dearth of infrastructure, global shortfall in supply, inadequate local production, shortage of foreign exchange, devaluation of the naira and logistic hitches, experts say.

“The price in Lagos is currently around N10, 000 to N10,500, but for the other parts of the country, it will be costlier due to logistics, said Micheal Umundu, national chairman, LPG Retailers Association of Nigeria

Umundu explained that the hike is due to factors like naira devaluation, higher cost of living and the fact that the market is controlled by the forces of demand and supply.

The increase in gas was also one of the items responsible for the surge in core inflation, which excludes the prices of volatile agricultural produce, to 14.90 percent in May 2022, the highest in almost five years from 14.18 percent in the previous month, according to the National Bureau of Statistics (NBS).

Before the rise, the cost of cooking gas was declining in the beginning of the year but it picked up again as a result of the Russia-Ukraine crisis.

Apart from Lagos, the cost of cooking gas has also increased nationwide. Data from the NBS show that the average price for refilling a 12.5kg cooking gas increased year-on-year by 103.46 percent to N8,726.30 in May 2022 from N4,288.95 in May 2021.

While month-on-month it increased to N8, 726.30 in May 2022 from N8, 164.37 in April 2022, representing 6.6 percent.

In terms of states, Abuja recorded the highest with N9, 308.00, followed by Ekiti with N9, 209.09 and Oyo, with N9, 184.06. Conversely, the lowest was recorded in Yobe with N7, 500.00, followed by Kano and Kogi with, N8, 175.00 and N8, 200.00 respectively.