The government disclosed this on Thursday while reacting to
the recent marginal drop in the cost of cooking gas.
According to findings, the price of 12.5kg LPG has dropped
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.
The development forced some LPG users to shift to charcoal
or firewood, 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.
The Programme Manager, National LPG Expansion Implementation
Plan, Office of the Vice President, Dayo Adeshina, stated: “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.”
About 65 per cent of the LPG is imported into Nigeria, while
domestic production accounts for 35 per cent, hence the cost of the commodity
in the global market affects the price locally.
Adeshina told our correspondent that the international price
of the LPG had risen so high in October last year, but dipped towards the end
of 2021 into January 2022, as this also contributed to the recent drop in the
LPG price across the country.
He said, “If you look at the international pricing of the
LPG, and that might change again because it is not a fixed price, in January
last year, it was $250 per tonne.
“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.”
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 to a further reduction in cooking gas
prices regardless of the price fluctuation in the global market.
Commenting on the development, the National Chairman,
Liquefied Petroleum Gas Retailers Association of Nigeria, Michael Umudu,
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 drop in
price,” 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.”