Financial Energy Review
The Liquidfied Petroleum Gas Retailers (LPGAR) has suggested to the Federal Government to establish more local LPG production plants, encourage storage and transportation of the product to avert price hike.
Mr Ayobami Olarinoye, the Branch National Chairman of LPGAR, made the remarks in the backdrop of the ongoing increase in price of cooking gas.
According to Olarinoye, the price has been going up in the last four weeks, but retailers have been largely bearing the burden.
“This is why the rise has not substantially reflected in the retail prices.
“The recent price increase as well as the expected further price increases is as the result of further depreciation of the Naira in recent time,” he said.
Olarinoye said: “Again, during this period of the year, international prices of LPG usually rises. This is the second major factor leading to the increases in the price.
“The Nigerian LPG market is often priced according to the international market because of the country’s dependent on importation for a substantial amount of LPG she consumes.
“Again, the country’s major supplier, the Nigeria Liquidfied Natural Gas (NLNG), supplies local marketers, using the international LPG price and US dollar rate.
“So, it is obvious that the price rise is as a result of recent changes in exchange rate and the global market price,” he added.
He said that NLNG had been doing its best but advised that other major operators in the industry could establish LPG production plants and make it available to the local market.
He suggested that if government could have an arrangement with NLNG and other possible producers to domesticate the pricing of the product, then it would make the product affordable to the consumers.
“Indeed the time is very critical. The price of PMS has risen beyond the purchasing power of the average person.
“Even price of diesel has started to rise. Again, prices of essential commodities, especially food have skyrocketed.
“It is really a difficult time for the people of this country. Like I said earlier, if government can work closely with NLNG and LPG importers and provide them with some incentives, then the price can be affordable to Nigerians at this critical time,” Olarinoye explained.
He suggested that NLNG could domesticate its LPG pricing system and increase its local supply.
Olarinoye said that a kilo of gas that usually sold within N500 and N600 now sell within N800 and N900 per kilogramme within Lagos and Ogun states.
