Exclusive: NALPGAM blames hike in cooking gas price on supply shortage .Says LNG should increase allocation for domestic consumption

Exclusive:

NALPGAM blames hike in cooking gas price on supply shortage

.Says LNG should increase allocation for domestic consumption

By Udeme Clement

The Executive Secretary, Nigerian Association of Liquefied Petroleum Gas Marketers, NALPGAM, Mr Bassey Essien has attributed the hike in the price of cooking gas in the country to shortage of supply.

Speaking exclusively with Financial Business News, he said, “Many factors are responsible for the skyrocketing price of cooking gas. To start with, Nigeria LNG ought to supply the bulk of the cooking gas in the country.

“So, from statistics, the quantity they supply now is about 350.000 metric tons per year, while the current consumption rate is about 800.000 metric tons. So, the differential is from imported gas.

“The reality is that the dealers bringing imported gas into Nigeria now source for foreign exchange (forex) on their own. The Central Bank of Nigeria, CBN, is not giving them any kind of concession for getting forex. These charges make them increase their prices.

“Also, LNG has only one vessel that delivers gas. It comes from Bonny to Lagos and goes back. There are coastal terminals like Port Harcourt, Warri and Calabar. Some of them had product from what they imported but LNG just did one supply to these coastal terminals. Because they did that supply with the same one vessel, it becomes an issue of scarcity, as the demand is greater than supply.  So, because of this gap, the few dealers are now increasing their prices. Within this short period, it has increased to about 30 percent”.

The Way forward:

Responding to question on the way forward, he explained, “Now, LNG finally brought gas to Lagos and the vessel has discharged but the price is put at N4.2 million for 20 metric tons truck.

“Before now, the price was N3.2million for the same 20 metric tons. The question now is, why the increase in price?

“In reality, the one vessel LNG uses can’t deliver effectively and it is too big to enter some waterways. LNG needs more vessels and smaller vessels that can enter any water”.

He pointed out, “LNG should increase frequency of vessel from Bonny to deliver gas. The quantity allocated for domestic consumption must be increased. 350.000 metric tons is too small for consumption, considering the consumption rate of about 800.000 metric tons”.