Home News Why cooking gas price skyrocketed in Nigeria (What you need to know)

Why cooking gas price skyrocketed in Nigeria (What you need to know)


Reliance on importation, introduction of 7.5 per cent Value Added Tax (VAT), devaluation of Naira as well as scarcity of inflow dollar have been adduced as major reasons responsible for the surge in the prices of Liquefied Petroleum Gas (LPG) also known as cooking gas.

According to the Chief Executive Officer of Eco gas Energy Resources Limited, one of the major processors and distributors of LPG in Nigeria, Chief Shina Luwoye, 60 per cent of the Liquefied Petroleum Gas (LPG) consumed in Nigeria is imported.

Expressing concern over the high price while speaking with journalists, Luwoye maintained that Ecogas has steadily pursued LPG adoption and penetration within the localities of her gas refilling plants and has aggressively pursued cost and margin cutting measures aimed at making the product more available and affordable in its catchment areas. The company currently serves up to 500, 000 families on a monthly basis.

Despite the Federal Government’s efforts to deepen the adoption of LPG, which have been yielding results, he stated that the recent uncontrollable north pole movement in the LPG market price curve remains a major threat to the domestic LPG market.

“We can boldly see this through the high demand for the product. Even my aged mother who hitherto forbids her tenants from using cooking gas now uses LPG for cooking. The gains we have recorded, which now make more people demand gas shows that we have done well as a country in terms of gas. Unfortunately, the recent uncontrollable north pole movement in the LPG market price curve is a major threat to the domestic LPG market.

“What we are now experiencing with gas also has elements of general price increase/inflation in Nigeria that is affecting the nation in general and other petroleum products. And, because just 40 per cent of demand for LPG is being supplied locally while 60 per cent is sourced through importation, a lot of other external factors have come to affect the price. Chief among these is the 7.5 Value Added Tax (VAT).

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“The NPSC LPG terminal at Apapa had played salutary roles in bringing down the price of LPG for many years. This critical facility with 8000MT capacity had been unproductive for over 6 months because of protracted maintenance, that could have taken the private sector to carry out in less than 30 days,” he said

Apart from losing over half a billion naira revenue, he stated that the unavailability of the facility has marginally contributed to the price increase.

“The devaluation of Naira is another cause of the cooking gas price surge, forex (foreign exchange) is another. The amount of dollar inflows is far less than outflow and this shortage has become a serious issue for importers of the LPG who need dollars to effect their importations,” the helmsman for Ecogas Energy Resources Limited declared.

Debunking insinuations that marketers of cooking gas are profiteering, Luwoye maintained that on the contrary, the businesses of the marketers and off-takers are at risk.

“The operators are now complaining bitterly because of the situation on the ground and its effects on patronage. And, if the price goes beyond the reach of the consumers, they will definitely look for alternatives. We have observed this dangerous trend at Ecogas and that is why we have kept looking out for ways to keep making gas available and affordable for people in our catchment areas.

“Asides from this, we have noticed that the information that the people have about safety and handling of cylinders is poor and we are doing a lot in this regard too. The people are not aware that this cylinder has expiry dates, the area also not aware that other adjoining materials to cylinders like hose, clips and others, have life spans too,” he stated

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Asides from the plan to deepen the company’s market share in the entire Southwest states from serving 500, 000 daily to 3 million people, Luwoye said the company has continued to sensitise the populace about the need for them to be aware of the expiry dates and life spans of cylinders, hose, clips and other materials.

“To us, we see this and other services as something key not only to the existence of Ecogas as a business but also to humanity.

“We do not only educate and inform our customers about safety, we also test the integrity of all cylinders brought to our plants before we dispense product. There are times we turned customers down, we refused to fill the cylinders when we discover leaks or any threat to the integrity of ‘the cylinders,” Luwoye said.

He blamed the gas explosion, which recently rocked Abeokuta on what he called; mishandling or illegal mixing of gas, a situation he said, has nothing to do with LPG supply in the Ogun state capital.


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