Cooking Gas Marketers Raise the Alarm over 15% Price Hike

  • Shell boosts gas distribution capacity

Ejiofor Alike

Marketers of Liquefied Petroleum Gas (LPG) under the aegis of Nigerian Association of Liquefied Petroleum Gas Marketers (NALPGAM) have raised the alarm over what they described as the artificial hike in the price of the product by 15 per cent within two weeks.

This is coming as Shell Nigeria Gas (SNG) Limited has stated that it has increased its domestic gas distribution capacity by 150 per cent over the last six months, representing an increase of over 100 million standard cubic feet of gas per day (MMscf/d) or equivalent to some 400 megawatts (MW) of gas- to- power.

Speaking to journalists in Lagos wednesday, the President of NALPGAM, Mr. Nosa Ogieva-Okunbor alleged that a cabal within the LPG sector is sabotaging the efforts of the federal government to deepen LPG consumption in Nigeria.

He said the efforts of the Office of the Vice President, Prof. Yemi Osinbajo and the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu were being thwarted by some LPG operators, adding that the marketers have been doing everything possible to encourage the use of cooking gas as domestic fuel.

Ogieva-Okunbor disclosed that the price of 20 metric tonnes of LPG has increased from N4 million to N4.6 million within two weeks, adding that this has resulted to a hike in the price of 6kg and 12.5kg cyclinders.

“About three weeks ago, we were in Abuja for the harmonisation of the new LPG policy so that it can hit the ground running. But three weeks after, this cabal started increasing the price of LPG.
Within two weeks, the price of LPG has increased by 15 per cent. What came into our minds is why is it now that the federal government is trying to make LPG available by creating a robust policy that these people are trying to kill the NLNG’s LPG programme and monopolise the market? NLNG ship will come and stay for three days without seeing any space to discharge. Another question is why is imported gas cheaper than locally produced gas? Who is behind it? Why is it that VAT is not paid on imported gas but is paid on NLNG product? You said that you want to encourage the use of cooking gas in Nigeria but the one produced in our backyard is more expensive than the imported gas,” Ogieva-Okunbor explained.

He called on the federal government to beam its searchlight on the LPG sector and remove VAT on imported product.

In a related development, Shell Nigeria Gas (SNG) Limited has stated that it has increased its domestic gas distribution capacity by 150 per cent over the last six months.

SNG’s Managing Director, Mr. Ed Ubong, told journalists in Lagos that the increase in capacity would enable the company to distribute more than 100 million standard cubic feet of gas per day (MMscf/d) to businesses in its western operations.

“The new capacity is equivalent to some 400 Megawatts (MW) of gas to power, and has been enabled by the construction of a second train at the Agbara/Ota Pressure Reduction and Metering Station (PRMS) in Ogun State, from where SNG supplied its first customers with gas. “The expansion project shows the commitment of Shell to Nigeria’s industrialisation through the monetisation of Nigeria’s abundant gas resources,” Ubong said.

Ubong said the modules for the second train were fabricated by a Nigerian company which collaborated with its foreign partners to safely execute the project without any Lost Time injuries (LTI’s).

“We are continuing the campaign for gas by discussing with various stakeholders to deepen and expand domestic gas supply to existing industrial and new manufacturing clusters in various locations in Nigeria,” he added.

SNG’s existing gas distribution system in the three states it operates – Ogun, Abia and Rivers – have boosted manufacturing output and helped these states to grow their internally generated revenues and provide local employment opportunities.

The company had executed a Memorandum of Understanding with the Rivers State Government for the distribution of gas to industries in the Greater Port Harcourt area and its environs. The agreement provides further opportunities for SNG to promote gas as a more reliable, cleaner and cost-effective alternative to liquid fuels in Nigeria.