• Monday, May 27, 2024
businessday logo

BusinessDay

Fears over plan to increase LPG price by terminal operators

There are fears that Nigerians may be faced with increase in the price of Liquefied Petroleum Gas (LPG) otherwise known as cooking gas.

According to industry sources, the price of the product may move from the present N3, 100 per a 12kg cylinder to about N4, 000 if the Federal Government fails to prevail on one of the terminal operators, said to be spearheading the increase, who recently received supply from the Nigeria Liquefied Natural Gas (NLNG) Limited.

However, a source close to the Department of Petroleum Resources (DPR), who craved anonymity, dismissed the increase fears, but agreed that terminal operators at one time or the other engage in subtle price increase, especially when they realise that their competitors do not have the product.

He said the marketers should ask the Federal Government to give directive that the selling price of the product to terminal operators should not be at the international price.

“What the terminal operators do”, according to him, “is that when one of them has the product and others don’t have, the one that has jerks up the price of the product. And when they all have they undercut one another by bringing down their prices to undermine themselves in order to attract customers.”

Speaking on the increase fears, the Nigerian Association of LPG Marketers (NALPGAM) said there is nothing to justify the increment.

Basil Ogbuanu, national president, NALPGAM, alleged that Algasco LPG Services Limited suddenly increased the price of gas from N3.3 million per 20,000 metric tons (one LPG truck) to N3.5 million within one week, translating to an increase of the 12kg cylinder from N2, 700 to N3, 000 at the LPG plants.

He said that when Algasco was contacted they alleged that the Mont Belvieu LPG price at the international market had increased from $563 per metric ton on September 1 to $576 as at September 15.

According to the NALPGAM boss, even if LPG was a deregulated product, the price of crude oil, which is also one of the parameters used by NLNG to determine the domestic price of gas, is currently falling.

He said if the government fails to act fast his members would be forced to response to the development by increasing the retail price of the product by a commensurate margin and this may ultimately discourage government’s efforts at encouraging the use of LPG as alternative to kerosene and firewood.

“Due to the sudden price increase, our members nationwide demand further explanation as to what led to it. We, therefore, advise that the status quo remains in respect of the product price.”

 

OLUSOLA BELLO