The Minister of State for Petroleum Resources (Gas), Ekperikpe Ekpo, has waded into the scarcity of liquefied petroleum gas, popularly known as cooking gas, promising to clamp down on marketers hoarding or exploiting consumers.
This was even as retailers complained over the differences between the price offered by the Dangote refinery and the prices the off-takers sold the commodity to the market.
It could be recalled that Alhaji Aliko Dangote once threatened to distribute cooking gas himself if the distributors did not cooperate with him to crash the price.
In an interview with our correspondent on Monday, the Chairman of the Liquefied Petroleum Gas Retailers branch of the Nigeria Union of Petroleum and Natural Gas Workers, Ayobami Olarinoye, said the Dangote refinery sold LPG at N15.8m per 20,000 metric tonnes to off-takers and major distributors, who resold the same volume between N18.4m and N18.5m to retailers.
Sources at the Dangote refinery told our correspondent that “the marketers pick product from us at N715,000/MT, from N790,000/MT.”
According to them, there are 1,000 kg in one metric tonne.
“In a metric tonne, you have 1,000 kg. Marketers pick up LPG at N715/kg from the refinery.
We don’t control the retail price. According to PIA and NMDPRA, only the government can fix prices. We can only control what we sell at the refinery. If they sell at N2,000/kg after buying at N715/kg, there’s nothing we can do,” the sources said.
Media recalls that the prices of cooking gas rose recently from an average of N1,000 per kilogramme to about N2,000/kg in some locations. This followed the recent strike by the Petroleum and Natural Gas Senior Staff Association of Nigeria during the rift between it and the Dangote refinery.
Almost two weeks after the strike was suspended, the prices of cooking gas refused to go down while the scarcity deepened.
Expressing concern over the development in a statement signed by his spokesman, Louis Ibah, the gas minister appealed for calm and understanding from Nigerians, assuring them that the situation was temporary and would normalise by next week.
According to him, the sharp increase in price was caused by two main factors: the industrial action by PENGASSAN at the Dangote refinery and the ongoing maintenance activities at the Nigeria LNG Train 4 facility.
The minister explained that the strike by PENGASSAN at the Dangote refinery temporarily halted LPG loading, while the maintenance work at NLNG reduced the volume of gas available in the domestic market.
He said these disruptions led to a shortfall in supply and a consequent rise in prices due to a demand–supply imbalance.
Ekpo, however, said the situation was improving as operations had resumed at the Dangote refinery, with loading of LPG to the domestic market already underway.
He added that the Bonny River Terminal operated by Seplat Energy had also commenced loading, while NLNG was gradually restoring normal operations as its maintenance neared completion.
“With these developments, supply to the domestic market is expected to stabilise by next week, leading to a gradual reduction in prices,” the minister said.
Ekpo reiterated that the LPG market remained deregulated and urged marketers, distributors, and other stakeholders along the gas value chain to be patriotic in their dealings. He appealed to them to desist from hoarding and refrain from exploiting consumers for profit.
“To ensure compliance, the minister has mandated the Nigerian Midstream and Downstream Petroleum Regulatory Authority to intensify monitoring of LPG depots across the country to prevent product hoarding and other sharp practices capable of worsening the current situation,” the statement added.
Speaking, Olarinoye held the view that there would not be a need to hoard gas if it were available.
“I insist the problem is about inadequate supply vis-à-vis the demand,” he said.
While welcoming whatever measure that would make LPG available and affordable, he stressed that no retailer had the capacity to hoard.
“What is our capacity in the first instance? We have limited closure (tonnage) we are allowed to store in a specific location because of safety concerns, and this is basically part of the reason why retailers are always the first ’casualty’ whenever there are supply glitches in the value chain. I can only speak for LPG retailers. Perhaps the government has enough security reports to suggest so. I believe, from what I know, that an inadequate supply of the product is the issue,” he said.
Speaking further, the retailer advised the government to find out why major marketers were not patronising NLNG like they used to do before the Dangote refinery joined the business.
“The government needs to know why the off-takers and the majors are no longer off-taking products from NNLG to complement Dangote. The NNLG should be able to sell if not at the same price as Dangote, then with a little difference that the off-takers can ignore. This would stimulate them,” he suggested.
Olarinoye urged the Federal Government to genuinely moderate the crisis between Dangote and the labour unions to facilitate smooth and consistent production and distribution of LPG.
“In the long run, the government should ensure other private players that are already given refinery licences fast-track the processes so that the nation will not only rely on a single source. There is a need to license more and ensure they commence construction.
“The Bola Tinubu administration should unravel the problem behind the four comatose Nigeria-owned refineries,” he advised.
Earlier, the Nigerian Association of Liquefied Petroleum Gas Marketers had alleged that retailers were to blame for the recent surge in cooking gas prices across the country.
NALPGAM’s National President, Oladapo Olatunbosun, attributed the price hike to gas retailers.
Appearing on Channels Television, Olatunbosun had attributed the price surge to temporary supply disruptions and market exploitation by some operators. He insisted that there had been no official increment in the price of LPG, blaming the situation on opportunistic marketers exploiting supply gaps created by the PENGASSAN strike.
“I sympathise with Nigerians as the President of NALPGAM because we never intended to have a situation like this. I must say categorically that prices of cooking gas have not gone up officially. What is happening is that some marketers are taking advantage of the supply shortage and market forces to make quick profits, which is wrong. We frown at this as an association,” Olatunbosun said.
However, LPG retailers disagreed, describing Olatunbosun’s comments as “unfair and misguided”.
Our correspondent recalls that LPG used to sell for as low as N950/kg in some locations before the sudden surge that followed the PENGASSAN strike.
As of Monday, Nigerians said the essential was still as high as N2,000 in places like Lagos and Ogun, while some reported minor cuts in prices, even as a number of gas retailers have yet to restock.
There are concerns that some were going back to firewood and charcoal for cooking. But the gas minister said normalcy would be restored by next week.
