Gas Price Rises By 122%

Amid the Federal Government’s N250bn intervention funds on the National Gas Expansion Plan, which intends to deepen usage across the country, data from the Nigerian Bureau of Statistics said on a year-on-year basis, price of refilling a 12.5kg cylinder of Liquefied Petroleum Gas, also known as cooking gas, increased by 122 per cent from N4,422 in July 2021.

The Bureau’s latest report said on a state profile analysis, Ebonyi recorded the highest average retail price for the refilling of a 12.5kg cylinder with N11,212, followed by Delta with N10,926 and Ekiti with N10,883.

Conversely, the lowest average price was recorded in Katsina with N8,355, followed by Yobe and Kano with N8,383 and N8,614 respectively.

Analysis by zone showed that the South-West recorded the highest average retail price with N10,334, followed by the South -South with N10,239, while the North-East recorded the lowest price with N9,139.

According to Group Chief Executive Officer, the Nigerian National Petroleum Corporation, Mele Kyari, more than 70 per cent of the over 200 million Nigerian population lacked access to clean cooking fuels.

Launched in August 2020 by the Central Bank of Nigeria, the Federal Government, in August 2021, commenced the implementation of the N250bn intervention fund for the NGEP.

The fund was meant to finance the establishment of gas processing plants and small-scale petrochemical plants, gas cylinder manufacturing plants, Compressed Natural Gas, among others.

Nigeria has proven gas reserves of 206.53TCF with plans to grow its reserves to 600TCF.

This is as households struggle amid rising inflation and declining incomes. Inflation is nearly 20 per cent, with the dollar-naira exchange rate over N670/$ at the parallel market where the majority of importers and manufacturers source their greenbacks. The NBS said incomes of 67 per cent households declined in August 2020 as against 2019.

The statistics body has not released data on household incomes since then, but the rising inflation is an indication that incomes are becoming increasingly worthless in Africa’s most populous nation, experts said.

Sheriffdeen Tella, a Nigerian academic economist and professor of economics at the Olabisi Onabanjo University, said government’s intervention was quickly needed to bring down costs of the product for the sake of the poor masses.

“The astronomical increase in the price of cooking gas will further aggravate poverty situation in the country. Cooking gas is not a luxury, it is a necessity. It is bad enough that we are grappling with high food inflation, and now there is an additional burden of an escalating cost of means of cooking the food. So, for the average Nigerians and the poor, this is an added burden, and obviously, the impact on poverty will be very profound. It has implications for hunger, food security, and things like this have a way of creating social tension in the country.

“Many households have even resorted to the use of firewood, charcoal, and all of these are not consistent with the current policy on deforestation, and climate change. So, it is very important that urgent steps are taken to intervene in bringing down the cost. This is particularly very important because of the impact of the high cost on the poor,” he said.