Marketers of Liquefied Petroleum Gas (LPG), commonly known as cooking gas, under the aegis of the National Association of Liquefied Petroleum Gas Marketers (NALPGAM), have warned that the continuous rise in the price of the product may escalate before December.
Executive Secretary of the association, Mr. Bassey Essien, who gave the warning during an online program at the weekend, said if the newly introduced 7.5 per cent Valued-Added Tax (VAT) on LPG was not addressed urgently by the federal government, the refilling price for a 12.5- kilogram (kg) gas cylinder might hit N10,000 before December.
The price of LPG refilling unit has continued to skyrocket, a trajectory that started late 2020, with the price of the energy source rising by over 100 per cent.
THISDAY’s checks revealed that, as at last weekend, the refilling price for a 12.5kg gas cylinder was between N7000 and N8000 as against N3400 sold as of December 2020.
Analysts and industry players have attributed the price hike to the forces of demand and supply including inflation, foreign exchange (dollar) scarcity, in-country supply deficit, the 7.5 per cent VAT and other sundry agency charges as well as the rising price of crude oil.
THISDAY had also reported penultimate week, based on information from a reliable industry source, about how some major oil marketing companies affiliated to the Major Oil Marketers Association of Nigeria (MOMAN) had formed a cartel where they allegedly cause scarcity and influence the price of LPG to their advantage.
However, Essien said the skyrocketing price of cooking gas was the major fear of members of NALPGAM and what it has been trying to avoid.
He noted that early in the year, a 20-metric ton of gas was selling for below N5 million but that same tonnage now sells for N10.2 million.
“The skyrocketing price of gas is our fear and what we are trying to avoid. Early in the year, a 20-metric ton of gas was selling for below N5 million but today, same tonnage sells for N10.2 million.
“As long as there is that supply shortage, the available quantity and the dynamics of supply-demand will keep pushing the price higher. If government does not address the recently introduced import charges and VAT, the price of cooking gas may as well reach N10,000 for a 12.5kg cylinder. Today the price has risen to N7,500 and N8,000,” he said.
He lamented that more Nigerians were being forced to return to coal, sawdust, kerosene, and other dirty fuels, a situation he said, has severe health and environmental implications, and as well, resulting to loss of patronage and profitability in their businesses.
Essien added: “The association is very concerned with the high cost as many Nigerians are resorting to the use of firewood, charcoal and kerosene to cook and the prices of these cooking energy have suddenly gone up.
“The association is interfacing with government, stakeholders, producers, importers to see how the situation can be arrested, as well as meeting with the marketers through moral suasion not to capitalise on the situation and inflict more pains on citizens by increasing the cost of gas in their locations.
“Though they are equally expending huge cost to have cooking gas at their locations.”
Source – ThisDay
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