BusinessDay

Nigerians grumble as Cooking Gas price keeps rising

In recent times, Nigerians keep on grumbling over the continuous rise in prices of cooking gas (liquefied petroleum gas). Many of them buy fewer quantities each time, while others who can afford high prices pay almost triple the amount for the same quantity as in 1999. Many Nigerians have not returned to traditional fuels like coal, firewood, and other biomass variants in preparing their meals because of the advantages of cooking gas.

Though its affordability has not adversely affected its adoption, its high price has limited its consumption as many Nigerians now opt for less quantity.
When President Muhmammedu Buhari took office in 2015, he made firm promises to make life more enjoyable and meaningful for all Nigerians by reducing prices. However, the president’s promise of price reduction has been confronted by some forces.
Despite the present administration’s commitment, to establishing a Domestic Liquefied Petroleum Gas Penetration Program (DLPGPP) to support Nigerian households that still use traditional fuels, which are inefficient and hazardous for users while polluting and degrading the environment, cooking gas availability and affordability are posing serious challenges to over 83 million Nigerians who live below the poverty line.

Data by the Nigerian Bureau of Statistics (NBS) shows that average price for the refilling of a 5kg cylinder of cooking gas increased by 21.42percent year-on-year to N2,397.60 in September 2021 from N2,215.33 in August 2021. Similarly, the average price for the refilling of a 12.5kg cylinder of cooking gas increased by 49.97percent year-on-year to N6, 164.97 in September 2021 from N4, 514.82 in August 2021. The states with the highest average price for the refilling of a 12.5kg cylinder of cooking gas were Cross River (N6,944.44), Anambra (N6,897.92) and Ogun (N6,779.17). The states with the lowest average price for the refilling of a 12.5kg cylinder of cooking gas were Niger (N5,175.00), Borno (N5,100.00) and Osun (N5,006.25).

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A survey of the prevailing prices in some selected states shows that the average price for filling a 12.5 kg gas cylinder today is N10,000. This shows that the price of cooking gas has increased beyond the reach of many Nigerians under the current administration more than any other government since democracy returned in 1999. This reveals that Nigerians are worse off under the current administration when compared with the previous administrations in terms of price hike.
The trend of movement of the price of cooking gas shows that the majority of Nigerians who have no other choices in preparing their meals but cooking gas are passing through serious hardship. And with the rising price of cooking gas, there may be a decline in consumption, as consumers move to alternative energy as cooking fuel.

The Federal government had, in March this year, declared 2021 to 2030 as Nigeria’s decade of gas, with the target of having the economy entirely powered by gas. This agenda shows that the government has some good intentions for the Nigerian people, but it seems there are some hindrances which the government has not been able to handle to make cooking gas more affordable.
Nigeria is endowed with vast natural gas resources but it does not have the required production capacity to produce enough cooking gas for domestic use. According to the former Managing Director of the Nigeria Liquefied Natural Gas Limited, Tony Attah, that NLNG produces only about 40percent of the demand of the domestic market. The remaining about 60percent of the demand of the domestic market is being currently imported from U.S, Algeria, Equatorial Guinea.
The cost of cooking gas importation is on the high side due to the prevailing exchange rate. The big issue is that part of foreign exchange for its importation is being sourced from the local market because the government and CBN have not had enough to offer a forex window for importers; the cost of accessing dollars in the local market is being passed on to millions of Nigerians. The introduction and implementation of 7.5percent Value Added Tax (VAT) policy on imported cooking gas by the Federal Government also contributed to cooking gas price hike in the country.
According to NBS, about 83 million Nigerians live below the poverty line of N137,430 ($381.75) per year. The prevailing high price of cooking gas has obviously contributed to the suffering of the 83 million Nigerians who live below the poverty line. It is expedient the government remove the 7.5percent VAT on cooking gas and other impediments that contribute to cooking gas price hikes in Nigeria.

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