Cooking Gas Dealers Quote New Prices as 12.5kg Refill Rise N17,000
- Cooking gas dealers have adjusted their prices again following exchange rate volatility
- The price of a 12.5kg refill cooking gas has surged from N12,500 to N17,000 as dealers blame hike in FX rates
- The dealers also said there is a relative supply shortage, which is spooking buyers in the market
Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.
Liquified natural gas (LPG), or cooking gas, has been sharply increasing. Recent prices have jumped from N12.500 to N17,000 for a 12.5kg refill.
The increase has caused concerns among stakeholders, including households, hotels, and restaurants, which need help coping with the high cost or shutting down their operations.
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Cooking gas dealers blame FX volatility
The president of the Nigerian Liquified Petroleum Gas Marketers Association of Nigeria (NALPGAM), Oladapo Olatubosun, blamed the price hike on volatility in the exchange rate.
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Olatubosun explained that the official exchange rate has increased above N1,500 per dollar, with black market rates surpassing N1,600 per dollar.
He disclosed that the volatility has driven cooking gas prices as the product’s pricing is based on dollar rates.
According to reports, a 20-metric-ton truckload of cooking gas, which earlier cost about N18 million, now sells for N22 million.
Recent market data shows a continuous rise in the cost of LPG, with prices for 20 metric ton loads rising above N2 million between July and August 19, 2024.
Demand exceeds supply
The NALPGAM leader expressed concern that the current prices remain very high for many Nigerians, warning that the unaffordable prices limit the adoption of LPG and have significant health implications for the public.
He noted that Nigeria’s annual cooking gas consumption stands at about 1,250 metric tons for the size of its population.
He said Nigeria's consumption rate contrasts with the six million metric tons consumed by Morocco and other African countries, such as Benin and Egypt.
He disclosed that Nigerians are reverting to using firewood due to the high cost of LPG.
The NALPGAM President called on the government to intervene through targeted subsidies for low-income households or develop a pricing mechanism that ensures affordability while supporting sustainability.
He stressed that the government must commit to increasing LPG use rather than relying on market forces.
Dealers blame scarcity for high prices
During a recent television interview, Felix Ekundayo, President of the Nigerian Liquified Natural Gas Association (NLPGA), also stressed the same concern, stating the role of exchange volatility.
He suggests that the Nigerian government redirects the gas exported to the local market to ease supply constraints and reduce prices.
He appreciated the Nigerian Natural Gas (NLNG) for dedicating its LPG production to the domestic market.
Findings by Legit.ng show that the prices of 12.5kg refills have surged as sellers blame market forces and the unavailability of the price hike.
Olawawale Ariyo, a manager at Gasland in the Iju-Ishaga area of Lagos, disclosed that the high prices are due to market forces and exchange rate fluctuations.
He disclosed that most LPG sold in Nigeria is imported, as more than local production is needed to meet domestic needs.
“The demand for LPG is rising daily, driving up the cost. Many Nigerians are now what I will call cooking gas-aware. So, the surge in demand is part of the reason.
“Also, sellers are battling supply shortages caused by exchange rate volatility. We cannot easily access FX in the official market. Most dealers and importers now source FX in the black market, which is way higher than the official rate,” he said.
NNPC exports LNG to Asia
The development comes as the Nigerian National Petroleum Company Limited (NNPC) disclosed that it has successfully exported LNG to Japan and China.
The company said the development is a milestone as it seeks to broaden its markets beyond Africa.
Data shows states with the highest prices
Legit.ng previously reported that The National Bureau of Statistics has revealed that the average price for refiling a 5kg Liquefied Petroleum Gas (Cooking Gas) cylinder in Nigeria stood at N6,591.62 in March 2024.
This represents a 7.10% increase compared to the N4,562.51 average price recorded in February 2024, which was N6,154.50.
On a year-on-year basis, cooking gas prices increased by 42.97% from N4,610.48, which was paid in March 2023.
Proofread by Kola Muhammed, journalist and copyeditor at Legit.ng
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Source: Legit.ng
