October Sees a 60% Surge in Cooking Gas Prices, Reveals Report

Infostride News can confirm a startling 60% price hike in Liquefied Natural Gas (LNG) or cooking gas at terminals during the month of October. At the beginning of the month, the cost of 20 metric tons of cooking gas at the terminal stood at N10 million. However, by October 20, this price had surged to N14 million per 20 metric tons, and shockingly, a circular obtained from the market revealed that by October 21, the price further soared to N16 million for the same quantity. This represents an alarming 66% increase in price within a single month.

The circular, obtained from Algasco/NAVGAS and issued by Allamin Daggash, identified as the marketing manager, stated that a metric ton of cooking gas was to be sold at N800,000 to gas retailers with immediate effect. When this pricing model is translated, it equates to N16 million for 20 metric tons.

Daggash attributed this sharp increase to two main factors: depreciation in foreign exchange rates and rising international market prices for the product. This explanation may seem plausible at first glance, but further investigation reveals that the price hike might have deeper roots than initially suggested.

Contrary to Daggash’s statement that the increase was primarily due to foreign exchange depreciation and the rising international market prices, evidence indicates that a significant portion, around 70%, of the cooking gas consumed in Nigeria is supplied by the Nigerian Liquefied Natural Gas Limited (NLNG).

Nigeria is recognized as having one of the world’s fastest-growing Liquefied Petroleum Gas (LPG) sectors, with a projected market size of $10 billion. The annual per capita consumption of LPG increased from 1.8 kilograms in 2015 to 5 kilograms in 2021. According to the Petroleum Products Pricing Regulatory Agency, domestic consumption of cooking gas exceeded 1 million metric tons in 2020, marking the first time in the nation’s history that LPG consumption reached the 1 million metric ton threshold.

It’s also worth noting that NLNG currently sells 20 metric tons of cooking gas to marketers for N9 million. Anne-Marie Palmer-Ikuku, the Head of Media Relations and Corporate Communication at NLNG, did not respond to inquiries regarding whether the company continues to supply the market for terminal owners, who have attributed the price hike to foreign exchange and international market price fluctuations.

Oladapo Olatunbosun, the President of the Nigerian Association of Liquefied Petroleum Gas Marketers, affirmed the situation, stating that terminal owners had not imported any products themselves. He questioned how they could attribute this price increase to foreign exchange and international market prices, given that the last consignment they sold was supplied by NLNG, with another consignment from the same source currently en route to the terminal.

Olatunbosun went on to express his concern that depot owners seemed to be exploiting the Nigerian population and undermining the government. He pointed out that the retail price had now reached N1,200 per kilogram, making it extremely challenging for the average citizen to afford. He suggested that these terminal owners, who often hail from other countries, use Nigeria as a quick source of profit without a vested interest in the nation.

While NLNG claims to supply 100% of its cooking gas to the Nigerian market, reports emerged in January suggesting that in 2022, the company was only able to meet 40% of Nigeria’s demand, which amounted to 400,000 tons of LPG. The remaining 60% was imported by marketers.

The spokesperson for Algasco, Friday Agwu, did not respond to phone calls and messages sent via WhatsApp messenger. This situation raises important questions about the pricing and supply dynamics within the Nigerian cooking gas market, with significant implications for both consumers and the government’s energy policy.