Wednesday, 31 July 2013

Cooking gas price rises by 16.6%

The price of Liquefied Petroleum Gas (cooking gas) has risen by about 16.6 per cent at most retail outlets in Lagos and Ogun State following the face-off between the major supplier of the product in the country, Nigerian NLG Limited, and the Nigerian Maritime Administration and Safety Agency.

As a result, a  12-kilogramme cylinder of gas, which normally goes for about N3,000 and which sold for between N3,300 and N3,400 on Monday, sold for N3,500 at retail shops on Tuesday.
However, customers were able to get the product at gas plants at a reduced rate depending on the price at which the plant owners sourced their products.
Major plants in Lagos and Ogun states started rationing their LPG stock last Friday and began increasing the price on Monday in some parts of the country.
This was said to have been caused by the speculation of an imminent crisis in the gas sub sector as a result of the crisis between NIMASA and NLNG.
Though over 80 per cent of retailers in Lagos did not increase the price of cooking gas on Monday, checks on Tuesday revealed that the price had been increased across board in Lagos and other parts of the country.
Investigations by our correspondent revealed that the retailers increased their prices by N500, thereby selling a 12kg cylinder full of gas for N3,500.
The National President, Liquefied Petroleum Gas Retailers Association of Nigeria, Mr. Michael Umudu, who spoke with our correspondent on the telephone on Tuesday, confirmed that LPG retailers had increased their prices by N500.
“Retailers are adjusting their prices by N500, and I can confirm to you that over 80 per cent of retailers in Lagos have started readjusting their prices. You know people like to take advantage of such a situation in Nigeria,” he said.
An LPG plant operator, who did not want to be named, insisted that the product was available at the plants and customers needed not entertain any fear that they would not get the product.
Our correspondent, who visited some gas plants in Lagos, confirmed the availability of the product.
An LPG tanker was seen offloading the product in a plant at Ikeja area of Lagos, while another plant located around Magodo area was seen selling products to customers on Tuesday afternoon.
An official at one of the plants said it was expected that the crisis would lead to price hike because plant owners and retailers would sell based on the cost the product was delivered to them.
“If the plant owners source products at a higher cost, they will surely increase their selling prices. It is not as if they are just inflating prices unnecessarily. It is what plant owners buy that they will sell,” he said.
Checks by our correspondent revealed that some consumers now preferred to buy gas at the plants rather than the retail shops because they were getting the product at relatively cheaper prices there.
However, these consumers represent a small portion of the cooking gas consuming population in the country, which means that majority of the consumers will still patronise the retailers.
NIMASA had on May 3, 2013 blocked the Bonny channel, preventing entry and exit of NLNG vessels over non-payment of levies.