Cooking gas price Increase Looms: Challenges Ahead for Nigerian Consumers.
Gas consumers in Nigeria are being warned to prepare for tougher times as marketers hint at an upcoming increase in prices. Olatunbosun Oladapo, President of the Nigerian Association of Liquefied Petroleum Gas Marketers, highlighted a multitude of factors behind this anticipated price hike, including rising international prices, high taxes, vessel costs, forex scarcity, and naira devaluation.
“The situation is very unfortunate because prices are going higher. Nigerian consumers are passing through very difficult times because they can no longer afford gas,” said Oladapo.
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Consumers are reportedly resorting to alternatives like firewood, charcoal, and sawdust for cooking as a result of these price pressures. The president urged the government to provide palliatives, reduce taxes, and ease the burden on the masses.
This announcement comes amidst findings that vessel scarcity in the international market is likely to lead to increased prices for Liquified Natural Gas (LNG), commonly known as cooking gas, in the coming months. The demand for heating fuel is set to peak in the 2023 winter, further exacerbating the supply challenges.
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Cause of Cooking gas price increase
Vessel charter rates have surged significantly, quadrupling the current price, impacting the margin for LNG traders and potentially resulting in higher prices for consumers.
The devaluation of the local currency is also contributing to the rise in domestic LPG prices. The Nigerian LNG bases its local sales on the prevailing exchange rate, and the recent naira devaluation has already had an impact on the price of LPG.
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Local consumers enjoyed lower prices in previous months due to a drop in international prices, but the situation has since reversed due to various factors, including naira devaluation.
The effects of these changes are evident in the retail gas prices as well. The average retail price for refilling a 5kg cylinder of cooking gas decreased by 6.71% month-on-month from May to June, according to the National Bureau of Statistics.
As gas consumers grapple with impending price hikes and market fluctuations, the Nigerian government and stakeholders are faced with the challenge of balancing energy affordability and market dynamics. The situation underscores the complexities of the energy market and the interconnectedness of global and local factors that influence pricing.
