Cooking gas scarcity is looming across the country as the price of the commodity rises to an all-time high of N1,000 per kilogramme (kg) from N750 barely two months after its speculations.
The price increase has been ascribed to the convergence of several variables, including the weak naira, restricted bulk storage, and the spread of ports across Lagos, Edo, Delta, and Cross Rivers.
According to experts, corporations importing the commodity are stockpiling it in anticipation of a price increase.
The scarcity of vessels to carry the commodity on the international market has influenced the cost of chartering vessels, and it is expected that costs would rise in the coming winter.
According to Bloomberg, the cost of chartering a vessel is $70,500 per day, according to Spark Commodities. Due to scarcity, the daily rate is likely to grow to $206,750 this month and $284,750 in November.
The Nigerian Association of Liquefied Petroleum Gas Marketers (NALPGAM) stated in August 2023 that there is a chance of a price increase for cooking gas due to a rise in the foreign exchange rate and international market activity.
Olatunbosun Oladapo, President of the Nigerian Association of Liquefied Petroleum Gas Marketers (NALPGAM), told BusinessDay that the government must boost local product supply and checkmate the role of intermediaries and terminal operators in order to avoid capitalising on currency rates.
“As I speak to you, I can confirm that the price of cooking gas has increased,” the Association’s President said. However, the president refused to reveal how much its members are paying for the product at the source.
According to Oladapo, the price increase is terrible, and consumers, middlemen, and retailers are experiencing the effects. “The situation is very unfortunate because prices are rising and Nigerian consumers are struggling.”
The abrupt increase in gas prices has left many Nigerians searching for alternative cooking methods, and experts warn that the present shortage might develop into a full-fledged crisis if not solved immediately.
“The consumers are beginning to depend on firewood, charcoal, and sawdust for cooking,” he said.
According to the association, rising international pricing, high tax rates, vessel prices, forex scarcity, and naira devaluation were among the reasons for the price review.
Kelvin Emmanuel, Chief Executive Officer of Diary Hills Limited, said that Nigerians’ need for cooking gas to power generators and cars is increasing per capita.
“The long-term effect of scarcity because of the shortage of bulk storage terminals, companies in the midstream importing product are hoarding for price speculation and FX volatility, is that prices will continue to rise per KG.”