The Nigerian Association of Liquefied Petroleum Gas Marketers (NALPGAM) has raised concern over the rising prices of cooking gas across the country, saying that the current prices are artificial.
The National President of the Association, Oladapo Olatunbosun, raised the alarm when he appeared as a guest on Channels Television’s The Morning Brief on Wednesday.
Olatunbosun was reacting to the current product scarcity, caused mainly by the crisis between members of the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) and the Dangote Refinery.
The strike had resulted in prices skyrocketing between about ₦1,700 and ₦2,000 per kilogram, depending on the location, and at ₦3,000 in some extreme cases.
However, while speaking on Wednesday, Olatunbosun said there had been no official increment in prices, blaming the price hike on market opportunists.
“I sympathise with Nigerians as the President of NALPGAM because we never intended to have a situation like this.
“I must say it categorically that prices of cooking gas have not gone up. No increment has been done officially.
“What is happening is that some marketers are taking advantage of the shortage in supply and the market forces that have increased demand. They are cashing up to make good money, which is wrong.
“We frown at this as an Association, and I’m happy that by the grace of God, normalcy will return in the next few days.
He explained the reasons behind the current LPG scarcity.
“About a year and a few months ago, one kilogram of gas was between ₦1,200-₦1,300, but it recently came down due to the production by Dangote. Dangote eliminated middlemen, and that made gas to land at a reasonable price.
“But what actually caused the temporary artificial prices and scarcity is that; before the strike, when you load from Dangote, he sends out about 50 trucks per day, which is good because it served the South West and some part of the North well, and if you add it to what you get from Apapa, and other depots in Lagos, because they also source their products from IOCs.
“So Dangote came in with his own strategy, selling directly to offtakers. That made importation unattractive. You won’t be able to compete if you import because you will incur losses.
“But at a time, Dangote also commenced renovation/maintenance, which affected loading. Trucks started spending like 14 days at Dangote yard before they could get products.
“So, marketers switched to Apapa, and nobody felt the impact.
“When Dangote finished renovation, and we were about to commence full loading, the strike came in. Although Dangote didn’t stop production, everybody had rushed to Apapa, and it was now out of product, and all the depots there were dry. The only vessel that came in from NOJ axes was meant to supply the depot could not berth because of the strike. And even when it berthed, the officers to inspect it weren’t on the ground because of the strike, and that caused about 5 days’ loss, and the real impact of the backlog became obvious.
“Now that the strike is off, the product has been discharged, and they are trucking out. But because everywhere is dry and the South West is the only place that consumes the largest amount of LPG in Nigeria,” he said.
According to him, the prices per kilogram should not be more than ₦1,300/kg.
He assured that the scarcity will soon be a thing of the past, as products are being trucked out across the country.
“The fact is that our national gas consumption has increased, unlike what we had two or three years ago, when we were stuck on 1.3 metric tons per annum; now we have gone up to the peak of 1.9 million, approaching 2 million metric tons. We have a surge in demand.
“The average price, depending on where you are buying…most of the people who brand ₦2,000 per kg, they didn’t tell you the source. If you buy products from a third party, the chain has been extended, and prices will go up, which is illegal, because it is like buying PMS from the black market. But if you go to gas plants, the price is maximum ₦1,300 per kg.”
“We are trying to get the products down to people, and NLNG is also trucking. By the weekend, the scarcity will fizzle out.”
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