Upsurge in Cooking Gas Demand Reduces Price of Kerosene

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  •  Marketers want NLNG to double supply in 2017

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Despite the current scarcity of kerosene, the ex-depot price of the product has dropped as a result of upsurge in the demand for cooking gas, which has equally led to declining demand for kerosene, THISDAY’s investigation has revealed.

Following the upsurge in the demand for cooking gas, the marketers of the product, who spoke to THISDAY at the weekend, have called on the Nigeria LNG Limited to double the supply to the domestic market from the present 250,000 metric tonnes yearly to 500,000 metric tonnes by 2017.

THISDAY gathered that many households have switched over to the use of cooking gas after the pump price of kerosene soared above N200 per litre in recent weeks.

With this development, the ex-depot price of kerosene, which was above N180 per litre some weeks ago, has dropped to around N170 per litre in most depots at the weekend.
Some Kerosene marketers told THISDAY that the drop in price was as a result of reduced demand as many households had switched over to cooking gas.

“The ex-depot price of DPK (Dual Purpose Kerosene) has dropped to average of N170 per litre. The product is still scarce and the price has not come down in the international market but the demand has reduced. Many people are now using LPG because of the high cost of kerosene,” one of the depot owners told THISDAY.

The National President of the Nigerian Association of Liquefied Petroleum Marketers (NALPGAM), Mr. Basil Ogbuanu also corroborated the position of the kerosene marketers in an interview with THISDAY at the weekend.
Ogbuanu argued that with the current price of kerosene, the product is now three times more expensive than cooking gas.
Ogbuanu added that with 12.5kg cylinder selling at N3,000 and 20MT Tanker selling at N3.7 million, a gas equivalent of one litre is less than N120, compared to kerosene, which is above N200 per litre.
He also raised the alarm that if the Nigeria LNG Limited does increase domestic supply from the current 250,000 metric tonnes to 500,000 metric tonnes by 2017, the sub-sector will experience supply crisis.

“The usage of cooking gas has really gone up. NLNG dedicated 250,000MT yearly but this is not enough. Despite the pricing policy of NAVGAS, they are the only company bridging the supply gap. As it is now, NAVGAS is bridging the supply gap but if we continue with this trend, supply will not be enough. The minimum NLNG should allocate to the domestic market in the next contract year should be 500,000MT,” Ogbuanu explained.

He further stated that apart from being cheaper than kerosene, cooking gas is more efficient in terms of cooking faster and being cleaner and environmental friendly.

“The only challenge we have is entry point, which is the cost of buying cylinders, and accessories,” Ogbuanu added.