The Federal Government on Thursday said it has started putting measures in place to ensure further decrease in the cost of Liquefied Petroleum Gas, popularly called cooking gas.
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Findings disclose that the price of 12.5kg LPG decreased from N8,800 to between N8400 and N8200. In some outlets, the price of the commodity dropped to between N7,800 and N8,000 as of Thursday.
Recall that in November 2021, it reported that the cost of LPG kept rising in 2021, jumping by more than 240 per cent between January and October 2021.
This resulted in the use of charcoal or firewood by some LPG users as consumers of the commodity raised the alarm over the persistent hike in its price.
The product had increased by 240 per cent for 12.5kg, moving up from N3,000 to N10,200 within the first 10 months of 2021.
When asked, the Programme Manager, National LPG Expansion Implementation Plan, Office of the Vice President, Dayo Adeshina, said “It is in government’s interest for the price to go down consistently and there are certain initiatives that are being taken at the moment, which hopefully will see to further drops in price regardless of the international cost,” When asked to state one of such initiatives, he replied, “The discussions are still ongoing and there are certain things that you can do to stimulate the market which will have an effect. One of them also has to do with storage.”
“It rose to $875 per tonne by the end of October and started dropping by the end of November into December, and came down to around $500 per tonne at some point but went up again in December to $708 per tonne.”
He added, “now, as of the third of January this year, that figure is $744 per tonne. So you can see there is a drop from about $800 around November to $700 in January. The issue here is that the price has been fluctuating”.
“Yes, you have the effects of Customs and the position of the VAT that made people pay tax for what they imported even in 2019 and 2020. Of course, some importers stopped importing, but there is a resolution going on to resolve that aspect.”
Adeshina assured Nigerians that the government would come up with additional measures that would see a further reduction in cooking gas prices regardless of the price fluctuation in the global market.
The National Chairman, Liquefied Petroleum Gas Retailers Association of Nigeria, Michael Umudu while reacting to it confirmed the drop in LPG price, attributing it to the increase in supply by the NNPC and NLNG.
“Also, many LPG users stopped using the commodity at the time when the price kept increasing and this reduced demand pressure on cooking gas, hence causing a rise in its availability and then a gradual price drop,” he stated.
Asked whether the Federal Government had removed the VAT on cooking gas imports, Umudu replied, “It (government) has not been enforcing the tax and has remained silent about it, but has not said anything about removing it. This also has helped in price reduction.”
Group Managing Director of the Nigerian National Petroleum Company Limited, Mele Kyari, last month confirmed to newsmen that the NNPC was increasing the supply of the LPG in a bid to force down its price.
Kyari said, “Two things are in play. One is the supply in the international market of gas. It moves with the price of every other petroleum product including crude oil and its derivatives.
So definitely, it is a reflection of what is happening in the international market. However, what we are doing is to increase supply and once supply increases, the price will come down.”