According to reports, the import price has increased by 240
per cent for every 12.5 kilogram, which means the price has increased from
N3,000 to N10,200 between January and October 2021.
About 65 per cent of LPG is imported into Nigeria, while
domestic production accounts for 35 per cent, hence the halt in imports could
further shoot up cooking gas price if the situation is not addressed.
The Executive Secretary, Nigerian Association of Liquefied
Petroleum Gas Marketers, Bassey Essien, told our correspondent on Monday that
the reintroduction of customs duty and Value Added Tax on imported LPG were the
basic reasons for the halt in its imports by importers.
He stated that there were several other issues and stressed
that if the halt in LPG imports should drag further, the supply of the
commodity domestically could suffer severe drop.
This came as NALPGAM in an open letter to the Minister of
State for Petroleum Resources, Chief Timipre Sylva, urged the minister to
urgently intervene in the skyrocketing price of LPG in Nigeria.
The open letter was signed by the National President,
NALPGAM, Olatunbosun Oladapo, and Essien. NALPGAM is the umbrella body of
operators of LPG bottling plants licensed by the statutorily empowered
government agencies to carry out the business of safe bottling of cooking gas.
Essien stated that due to the fears expressed by importers
who had stopped importation of LPG into the country, cooking gas sourced from
the Nigeria Liquefied Natural Gas company was now selling in the region of N11m
per 20 metric tonnes truck.
This, he said, was with a cumulative daily increase of
N300,000 to N500,000 per 20MT truck without the imposition of VAT and customs
duties.
Providing further explanation on this, Essien said, “The
NLNG supplies LPG to the terminals and these terminals sell to the marketers
and at times in a day, the price can go up by about three times.
“Take for example, I was granting an interview on Saturday
morning on this same issue and that morning some terminals were selling for
N11.6m to N11.7m, but as I stepped out of the interview, it had increased to
N12m.
“And the annoying part is that since about a week or two
now, nobody has been importing gas because of the issues with customs and VAT.
And this is because since the position on these issues have not been clearly
stated, importers have to pause.”
He added, “The customs is even clamping down on importers
and so they cannot import anything, which means that the product in circulation
across the country is from the NLNG.
“But when there are issues like this, some unscrupulous
people will want to capitalise on the situation, which they are doing, because
right now, from what we’ve got, the price at which NLNG product gets to Lagos
is about N7m, but you get it at N11m and above.”
On the price increase, the association stated that despite
the decade of gas policy and measures by government, the cost of cooking gas
had continued to rise.
It said, “Despite the strategies employed by the government
with its anticipated benefits, the reverse seems to be the case with the bulk
of LPG consumed in the country largely imported.
“The availability of the product for domestic consumption
has been skewed majorly to 65 per cent import dependence while only 35 per cent
has been attributed to local supply.
“The obvious devaluation of the local currency, inability to
access foreign exchange by importers, the increasing international price
against which the cost of domestic LPG is indexed as well as the anticipated
re-imposition of VAT and customs duties with retrospective application have all
contrived to push the price of LPG upward.”
NALPGAM added, “It has been observed that the above factors
have seriously increased the price of gas to the extent that a 12.5kg gas which
sold for N3,000.00 in January, 2021, now sells for between N10,000 to N10,200,
depending on area of the country.
“The daily galloping price of gas if not properly handled
may derail the lofty ideals of the gas expansion plans of the government as
well as the job opportunities the programmes were intended to create.”
The association stated that the price of LPG had
exponentially skyrocketed over the last few months.
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