Liquefied Petroleum Gas (LPG), commonly known as cooking gas, has dropped by 31.8 per cent from its peak of about N2,200 per kilogramme to N1,500/kg, giving some relief to Nigerian households.
Edu Inyang, President Nigerian Association of Liquefied Petroleum Gas Marketers, NALPGAM, in an interview with Daily Sun, attributed the drop to sustained engagements among industry stakeholders, regulators and government agencies to improve supply and stabilise the domestic LPG market.
“The cut is as a result of consultations with key players in the sector to address factors that were driving up prices,” he said.
“The consultations are going well. Product availability has improved and confidence has returned to the market which has helped bring prices down, he said.
The latest price is N700 per kilogramme less than the previous high of N2,200/kg, which translates to a 31.8 per cent decline.
The move follows months of concern over rising LPG prices which have prompted many households to reduce usage or switch to other cooking fuels.
Inyang was optimistic about the sustainability of the price drop, saying consumers could enjoy more reduction if the current market conditions continue.
We look for the decline to continue. Prices are however subject to various factors including international market conditions, foreign exchange rates and logistics costs. “If they stay favorable, they should continue to enjoy lower prices,” he said.
He said efforts by regulators and industry players to improve supply and clear the bottlenecks in the LPG value chain were beginning to pay off.
Speaking on the liberalisation of the LPG market, the NALPGAM president said marketers with the capacity were ready to take advantage of import opportunities to increase supply and deepen competition.
He said more private sector participation in the importation of products would improve the efficiency of the market and help moderate prices in the long run.
The decline in cooking gas prices is anticipated to ease the financial pressure on millions of Nigerians facing high living costs and rising energy costs.
Remember the directive the Federal Government issued on Monday to regulatory and security agencies to clamp down on the diversion, hoarding and illegal storage of Liquefied Petroleum Gas (LPG) in order to protect supply and restore stability to the market in the face of rising cooking gas prices and supply disruptions.
The directive was given in Abuja at an emergency stakeholder engagement convened by the Minister of State Petroleum Resources (Gas), Mr. Ekperikpe Ekpo to develop coordinated solutions to the recent spike in cooking gas prices.
The Minister said the increasing LPG cost was a national issue with serious consequences for households, small businesses and the economy in general.
But he assured that the Federal Government would continue to work towards easing the burden on Nigerians.
Ekpo directed the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) to enhance market surveillance, develop a strong pricing mechanism to steer the market and sanction operators who indulge in market distorting practices.
He also called for a collaboration between the NMDPRA and the Department of State Services (DSS), the Economic and Financial Crimes Commission (EFCC) and the Nigeria Police Force to support enforcement efforts, eliminate artificial scarcity and ensure the uninterrupted movement of LPG across the country.
“We have directed NMDPRA to increase monitoring, engage operators and collaborate with security agencies to discourage hoarding, eliminate artificial scarcity and improve transparency in distribution and pricing,” he said.
On the supply side, Ekpo said marketers had shown willingness to import more, while expected deliveries from fresh domestic facilities including the Seplat gas facility were expected to lift supply in the coming weeks.
The government was also exploring a local blending initiative with the Nigeria LNG Limited, domestic producers and depot owners to improve supply, reduce dependence on imports and encourage greater price stability, he said.
“There is no need to panic. “The Government remains committed to ensure adequate supply of gas locally and to promote the Decade of Gas Initiative as a route to cleaner cooking, industrial growth and energy security,” he said.
The Chief Executive of the NMDPRA, Mr. Rabiu Umar, also spoke at the meeting, saying the Authority has started an enforcement campaign on pricing and supply-chain practices, warning that operators caught in the act of excessive price increases will be severely sanctioned.
“We are going to be a lot more aggressive to make sure that no factor is allowed to keep prices at stratospheric levels. We expect to see a significant improvement in supply and a drop in prices before the end of next month,” Umar said.
The engagement was attended by key senior representatives of gas suppliers, marketers, distributors and consumer groups including the Nigerian Gas Association (NGA), the Major Energy Marketers Association of Nigeria (MEMAN) and the Nigerian Association of Liquefied Petroleum Gas Marketers (NALPGAM) amongst others.
