Marketers blame oil price, forex as cooking gas price rises again

Marketers of Liquefied Petroleum Gas, popularly called cooking gas, on Monday said the cost of LPG had continued to increase on a weekly basis due to the fall of the naira against the United States dollar and the rise in global crude oil prices.

Speaking under the aegis of the Liquefied Petroleum Gas Retailers Branch of the Nigeria Union of Petroleum and Natural Gas workers, the LPG dealers stated that the cost of the commodity was currently determined by market forces.

The NUPENG LPG retailers’ branch Chairman, Chika Umudu, told our correspond that in the past two weeks, the cost of 12.5kg LPG had increased by about N300.

About two weeks ago, marketers of the commodity raised the alarm in a statement issued by the union over the continued rise in the price of cooking gas.

They had urged the government to intervene, considering the energy crisis in Nigeria as seen in the drop in power supply and prolonged petrol scarcity.

When asked on Monday if the cost of the commodity was stabilising, Umudu replied, “The price has continued to increase. Between the time we issued that press statement and now, the 12.5kg gas has increased by between N200 and N300.

“In some cases, the dealers don’t usually detect the increment immediately. There’s a way we suppress it but when we cannot we release the price.”

On whether there had been any response from the government based on the recent call by the body, he responded in the negative, stressing that the cost of LPG was currently determined by the rate of foreign exchange and crude oil prices.

Umudu said, “No response at all from the government. The situation now is tied to market forces, which include foreign exchange rates and the price of oil in the international market.

“The recent hike in the dollar rate is one of the major factors causing the increase in the price of cooking gas. The rise in dollar price is a major factor, coupled with the increase in global crude oil prices.

“The weakening naira is a factor that has really impacted the cost of LPG. However, there are other minor concerns such as low capacity in the utilization of resources.”

Umudu, however, noted that the call of the union on government for intervention was still tenable, adding that if the naira continued its fall against the dollar, the cost of cooking gas would keep rising.

He stated that the cost of 12.5kg LPG currently ranged between N9,000 and N10,000 depending on the location of purchase and that this might increase further going by the prevailing market forces.

Umudu has stated that the NUPENG branch union considered it as an irony that such price increases were happening at the time when the government was, through policy statements, assuring Nigerians of adequate supply of the product at affordable prices.

“Recall that between December 2020 and early months of 2021, the government through its various schemes, inaugurated the gas expansion program which is tagged, ‘Decade of Gas’,” he stated.

He said the programme’s aim was not only to make LPG available to all Nigerian homes irrespective of income level but also to expand the use of gas for other purposes such as automobile and public/private electric generation.”

Umudu said, “It supposes that enabling infrastructure would have been in place before the inauguration but the events immediately after the inauguration prove the contrary.

“This is not equally good at this time when efforts should be at the top gear to expand the use of LPG in the country as a means of reducing environmental pollution, deforestation and desertification.”

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