Some oil and gas experts have advised the federal government to fully utilize our domestic potential to end the incessant rise in Liquefied Petroleum Gas (LPG) prices.
Experts also advocated for increased LPG storage capacity, also known as cooking gas, to protect the country from the consequences of falling international market prices.
The experts spoke to the News Agency of Nigeria (NAN) on Wednesday in Abuja in response to the ongoing increase in the price of cooking gas.
According to NAN, many LPG stakeholders, including consumers and retailers, had complained bitterly about the constant price increase and suspected quality reduction, which hurt users.
According to Dr. Olanrewaju Aladeitan, an oil and gas expert, gas is traded as an international commodity and is thus vulnerable to global vulnerabilities and shock.
According to him, the current situation is exacerbated by the ongoing conflict between Russia and Ukraine.
“The situation remains unchanged. “Our best bet is to maximize our domestic potential; otherwise, we will continue to see rising gas prices,” he advised.
In addition, an economic expert, Mr. Yushau Aliyu, stated that due to the high price of LPG, which ranges between 800 and 900 Naira per kilogram, not enough domestic investment had been made in the industry.
While criticizing the country’s reliance on LPG imports, Aliyu stated that it was not good because when prices in the international market fluctuated due to a variety of factors, they would inevitably be passed on to consumers.
“Consumer income will be eroded, and as consumer income continues to be eroded, it will have a multiplier effect on the economy, causing such an uneven distribution of resources.”
“However, one critical point is that we cannot separate the situation from the Russian-Ukraine tensions.”
“We must recognize that Russia is attempting to maximize its benefits by supplying less and taking more.” Russian officials are attempting to punish European countries by distorting the supply function.
“In this scenario, the Russian government will continue to reduce supply, capitalizing on the fact that the West must lift certain economic sanctions against the Russian economy,” he predicted.
According to Aliyu, if the stain persists, it may presage larger problems because people will return to deforestation.
This, he said, implied that more people would choose charcoal, and if this trend continued, all afforestation efforts would hurt our environment and our health.
“The health risk will be disastrous for the economy because anyone who does not spend money on LPG will have to spend money in the hospital to deal with the problems caused by domestic coal use.”
“These are the ramifications,” he explained.
While advocating for increased LPG storage capacity, Aliyu stated that the country produced only 40% of the gas needed for consumption, which was insufficient, resulting in 60% of the gas being imported.
To address such issues, the economist believes the government should increase domestic LPG investment.
“For example, a project like the NNPC AKK Gas Pipeline, if successful, will promote supply capacity; however, storage capacity is also a challenge, and we must account for longer periods of price distortion.”
“In addition, most economists around the world are looking up to gas subsidies for the less fortunate.”
“Because they cannot enjoy when the price is N900 per kilogram, which is significant to a poor household.” “There must undoubtedly be a price check on what must be consumed in the economy,” he said.
Mr. Promise Ajujumbu, an LPG retailer who confirmed that the current price was set in May, urged the government to increase domestic gas production so that events in the international market do not distort prices due to a lack of supplies.
“The price is currently N11,000 for 12.5kg, with most dealers selling at N900 per kg.”
“In April 2021, we purchased one tonne of LPG for N580,000; now, it is sold for N715,000 per tonne.”
“The cause of the rise is not limited to Nigeria.” Because most of Ukraine’s and Russia’s oil is bound by European and US sanctions, it is a global problem.
“As a result, we cannot patronize them.” The remaining oil-producing countries in the international market are now under intense pressure, and as a result, gas prices have skyrocketed,” said the gas dealer.
According to him, the high cost of product transportation was caused by the high price of Automotive Gas Oil (AGO), also known as diesel used by petroleum distributors (tanker drivers), which influenced the price of gas.
“The government should put measures in place to intervene because when there is scarcity, adulteration becomes a problem,” he advised.
Some Nigerians also spoke to NAN, urging the government to subsidize LPG in the same way that PMS was subsidized because they could no longer afford the constant price increases.
Mr. Jasper Ajala decried the exorbitant price of LPG, noting that even the wealthy were frustrated by the current price.
Ajala urged the government to subsidize domestic gas prices as well as find a long-term solution to the country’s energy crises.
“I purchased a 12.5 kg cylinder of LPG for N10,500. I am a civil servant, and my salary no longer covers my monthly expenses, let alone paying bills, children’s school fees, and house rent.”
“The government claims to be protecting the environment, but they are encouraging tree felling for firewood by allowing the price of LPG to skyrocket.”
“If gas is available and affordable, the ban on tree felling can be easily enforced because people will always use gas.”
“There is inflation, and how does the government expect the masses to survive if not through subsidy?” he explained.