A report from Channels Television on Friday said that demand for cooking gas fell “due to rising inflation rate”, resulting in low purchasing power of consumers.
The demand for Liquefied Petroleum Gas or cooking gas has fallen over rising cost of living despite several interventions by the Federal Government to ramp up supply and boost local consumption, Channels Television can authoritatively report.
Channels Television’s survey team on Friday gathered from retailers that demand for cooking gas fell “due to rising inflation rate”, resulting in low purchasing power of consumers.
“We are now experiencing low demand from consumers because inflation has pushed prices of goods and services above what the common man can bear,” a retailer around Isolo told Channels Television.
The Nigerian Bureau of Statistics had on Thursday, announced that the inflation rate rose from 28 per cent in December to 29.90 per cent in January.
Market survey revealed that price of 1kg of cooking gas has since risen from N1000 in January to around N1200 depending on the area.
Our team gathered from a reliable source that two 20 tons of LPG vessels owned by the Nigerian Liquefied Natural Gas Limited are currently discharging products at the Lagos port at a landing cost of N21m each. This brings the landing cost of 1kg to about N1000.
It would be recalled that price was around N16m per 20 tons as of December.
A source close to the matter hinted that middlemen now sell a 20-ton vessel of cooking gas at between N22m-N23m, further compounding the plight of retailers who have to pass the high prices down to consumers.
“If the landing cost is N1000 per 1 kg, how much will the product now be sold at to marketers? The gas market is no longer attractive because consumers no longer patronise us. Most people now go for either charcoal or firewood or at best kerosene,” the source added.
President of the Nigerian Association of Petroleum and Gas Marketers, Dapo Olatunbosun told Channels Television that prices are now being controlled by rising inflation and market forces, unlike last year when prices were influenced by middlemen.
“NLNG’s supplies have been consistent, and middlemen haven’t been able to influence prices like before because we have not been keeping quiet. It could have been worse if we had not spoken up,” he said.
The development comes on the heels of Olatunbosun’s earlier outcry that the price of a 12.5kg cylinder of cooking gas could hit N18,000 as of December if the government did not wade into continuous price hikes by middlemen.
“We now have mixed supplies both from importation by independent marketers and NLNG, but supplies are dominated by NLNG.
A market survey carried out revealed that as of the beginning of October, the price of 20 metric tons at the terminal had moved from N10m to N16m, representing a 66 per cent rise in price within the space of one month.
Depot owners had blamed the sharp increase on depreciation in foreign exchange and increase in price at the international market.
However, outcry by gas retailers had resulted in FG summoning the Nigerian Midstream and Downstream Petroleum Regulatory Authority to an emergency meeting, Channels Television learnt.
Government’s supply interventions come as a result of former president Buhari declaring 2020 and beyond a Decade of Gas to boost both local production and consumption.
Credit: Channels Television
