Finance

Cost of 12.5kg cooking gas hits N9,400 in May 2022, highest in 3 years


The cost of purchasing a 12.5kg cylinder of household cooking gas in Nigeria has increased from N7,000 in September 2021 to N9,400, as at May 31, 2022,

A cursory look at the data shows that the price increased to its highest level in over three years. Specifically, a 12.5kg cylinder of household cooking gas increased to its highest since November 2018.

This was confirmed by our analyst after conducting interviews with dealers and consumers, who lamented over what they described as a progressive hike in the price of Liquified Petroleum Gas (LPG), commonly known as cooking gas, across major cities in Nigeria.

What consumers are saying

One of the consumers and a resident of Cele-Egbe Ikotun, Lagos, Funmi Omole, lamented over what she described as a deliberate effort by the government to frustrate ordinary Nigerians.

According to her, she bought gas in her area at N6,200 per 12.5kg around February and the same commodity has increased to N9,400 within a few months.

She said, “It is becoming unbearable to survive in Nigeria, as the cost of every essential commodity has been on the rise since the beginning of this year and there is no assurance that it will end anything soon.

“The unfortunate thing is that the government does not care about its citizens because how do you explain a situation where it is so difficult to survive and our leaders are busy buying N100 million presidential form to contest in 2023 elections. Nobody cares whether we survive or not, as long as they are fine.”

Another consumer in Lagos, who simply referred to herself as Glory, told Nairametrics that she refilled her 12.5kg cylinder with N9,550 on Thursday around Ojodu Berger. According to her, the rising cost of gas will have a severe impact on the average Nigerian and one of such is the cost of food bought from vendors.

He said, “The cost of food items like rice, beans and even garri has been on the increase for months. This frequent hike in the cost of cooking gas will make matters worse, as several food vendors now use gas for their cooking.”

In case you missed it

  • Nairametrics had reported in March 2022, that the cost of purchasing a 12.5kg cylinder of household cooking gas in Nigeria increased to N8,500, as at March 28, 2022, from N7,000 recorded in September 2021.
  • This was confirmed by our analyst after conducting interviews with dealers and consumers, who lamented over what they described as a progressive hike in the price of Liquified Petroleum Gas (LPG), commonly known as cooking gas, across major cities in Nigeria.
  • According to them, the cost of gas is a major concern because most homes use gas cylinders. They added that they may resolve to using charcoal for cooking.

What you should know

  • Nairametrics had reported in July 2021, when the National Chairman of Liquefied Petroleum Gas Retailers Branch of NUPENG, Mr Chika Umudu, explained that the price hike was due to the country’s high dependence on the importation of LPG.
  • According to him, Nigerian LNG Limited, which accounts for more than 40% of the LPG supply volumes in the country, should be supplying the domestic market in accordance with the demand, rather than having a fixed quantity per annum.
  • Energy experts had expressed concerns over Nigeria’s inability to deepen the penetration and utilization of LPG in the country despite theoretically being in a position to produce sufficient LPG to meet local demand.
  • Recall that in September 2021, oil marketers under the aegis of the Major Oil Marketers Association of Nigeria (MOMAN), protested the Federal Government’s reintroduction of Value Added Tax (VAT) on imported LPG.
  • They argued that the introduction of VAT to the already high price of gas which is largely imported due to global gas crisis will negate the government’s policy on the adoption of LPG.
  • The association, which are major stakeholders in the downstream sector of the oil industry asked the federal government to rescind its decision by removing the 7.5% VAT on the product, warning that the fee will hamper the adoption of gas in the country and create a barrier to the objectives of the ‘Decade of Gas’ agenda of the government.

Bottomline

The incessant hike in the price of cooking gas coupled with the dwindling purchasing power of the average Nigerian does not bode well for the continued adoption of LPG by both rural and urban dwellers, and it is outrightly counterproductive to the government’s widely publicised LPG policy.



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