Home Oil & Gas Demand for cooking gas drops over price hike

Demand for cooking gas drops over price hike

Cooking gas-lagospost.ng

Demand for Liquefied Petroleum Gas or cooking gas has fallen despite several interventions by the Federal Government to ramp up supply and boost local consumption.

Gas retailers reported over the weekend that cooking gas demand had fallen due to “low income and poor purchasing power” of consumers.

“We are now experiencing low demand from consumers because inflation has pushed prices of goods and services above what the common man can bear,” a retailer around Isolo, Akinleye said.

Another seller, John, around Oke-Afa also said consumers now buy in smaller quantities.

“To worsen the case; most people don’t buy 12.5kg anymore. They now come with 5kg, or 6kg and even the smaller ones and augment it with other forms of cooking like kerosene and charcoal,” he said.

Market survey revealed that prices of a 12.5kg cylinder are now between N11, 000-N12, 000 depending on the area.

While speaking, President of the Nigerian Association of Petroleum and Gas Marketers, Dapo Olatunbosun said although FG through the Nigerian Liquefied Natural Gas Limited had recently made sure local supplies has been consistent, and prices have stabilized, however; consumers no longer call for cooking gas as expected.

He however did not state how much demand had fallen.

“The price is stable for now. it could have gone up if not for our cry.

“Every depot is wet now. Supply is better. Price is stable at N16m per 20 metric tons- it could have been worse. But demand is falling amidst the low income and poor purchasing power of people. Hope demand may go up slightly in December but would not be significant when compared with previous years,” he said

The development comes on the heels of Olatunbosun’s earlier outcry that the price of a 12.5kg cylinder of cooking gas could hit N18, 000 by December if the government did not wade into continuous price hikes by middlemen.

However, as of Sunday, Oladapo said government’s intervention had stabilize local supplies and prices have stabilized.

“We now have mixed supplies both from importation by independent marketers and NLNG, but supplies are dominated by NLNG.

“The price is expected to be stable, probably to fall a bit because of steady supply. The intervention of the government and the effects of the outcry by our association may also hold the price steady and possibly fall in December. We will keep close monitoring of price and any unjustified increases will be restricted by our association.

“If not that cooking gas is a classified product and only a few can afford it, even the local supplies would not be enough to go round. But let’s say if price of 12.5kg was around N5000; it would be affordable for the common man especially at this time,” he added.

A recent report says NLNG plans to shut down its six-train, 22 million tonnes per annum capacity plant in Finima, Bonny Island, Rivers State over a proposed routine maintenance operation scheduled to commence by February or March 2024.

It was earlier reported how middlemen jerked up price by 66 per cent in October alone.

Market survey carried out revealed that as of the beginning of October, price of 20 metric tons at the terminal had moved from N10m to N16m, representing a 66 per cent rise in price within the space of one month.

Depot owners had blamed the sharp increase on depreciation in foreign exchange and increase in price at the international market.

However, outcry by gas retailers had resulted in FG summoning the Nigerian Midstream and Downstream Petroleum Regulatory Authority to an emergency meeting.

“The federal government has stepped into the case, and has called NMDPRA for a meeting, because, everyone was saying the job of the regulator was to ensure sanity in the market,” he said, adding that prices of cooking gas should begin to reduce in the coming weeks.

“We expect prices to begin to drop starting from this week, so prices will no longer reach N18, 000 by December as earlier projected,” Olatunbosun said earlier this month.

“Atleast they (depot owners) now know that everybody is watching them, and they won’t be increasing prices anyhow like they used to,” he added.



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