Wednesday, December 8, 2021

Nigerians face more hardship over hike in price of gas.

There are strong indications that the current conditions of Nigerian households and industries occasioned by high cost of Liquefied Petroleum Gas (LPG), otherwise known as cooking gas and diesel may get worse anytime soon.

Recent updates  reveal that price of cooking gas has risen by over 100 per cent in the past few months as 12.5kg is currently selling for between N7,500 and N8,000.

Marketers are warning that unless supply shortage leading to persistent increase in the price of the commodity is addressed, 12.5kg could rise to N10,000 before December.

Findings further showed that 12.5kg of cooking gas was sold in Lagos for N3,800 in October 2020, N4,500 in June and July 2021, N6,000 in September, and now N7,500 or N8,000 in Lagos and Ogun states, depending on locations.

In the same vein, the price of diesel has already skyrocketed to N350 per litre, a development that may further worsen plight of local manufacturers and businesses, which largely rely on the product for power generation in the face of erratic power supply in the country.

The skyrocketing oil price, expected to hit $90 per barrel before the end of this year, will also push prices of petroleum products to a record high and worsen the spike in price of diesel and cooking gas.

As President Muhammadu Buhari presented a budget of N16.39 trillion to the joint session of the National Assembly last month, the current global energy crisis would have been a bumper harvest for oil and gas dependent countries like Nigeria, as current price increase already created a windfall of over $1 trillion revenue for international oil companies.

But the lack of local refining capacity meant that import of products (aviation fuel, PMS, diesel, LPG and others) would erode projected gains. The spike in prices of both products are linked directly with the massive depreciation in the value of the naira, as they are dollar denominated.

Across key global economies, energy crisis has worsened the economic devastation caused by COVID-19, as worst hit countries like China and others in Europe prepare for a cascading situation ahead of winter.

Although renewable energy has been on the rise, most analysts have expressed pessimistic view whether the emerging option could enable consumers evade spiking bills.
Experts attribute the price hike of LPG to dearth of infrastructure, global shortfall in gas supply, inadequate local production, shortage of foreign exchange, devaluation of naira and logistic hitches.

Already, the current price hike has triggered the use of kerosene, charcoal, firewood, saw dust among other energy sources whose prices have started rising as well in Lagos and Ogun states.

Some  consumers  have found it difficult to cope with the price hike, thereby, alternating between the use of charcoal and kerosene stoves.

A trader resident in Akute, Ogun State Mrs. Franca lamented over the  incessant hike in cooking gas , she says it  had affected other commodities in the market.

According to her, the situation has gone beyond control among people with low purchasing power, adding that she would simply go back to the use of firewood and kerosene stoves if the price continues to rise.

“If someone like me is lamenting, you can imagine what hundreds of other residents are going through,” she said.

“Many of them have gone back to firewood and charcoal for their domestic cooking. You can see my coal-pot here.”

She believes it is becoming cheaper to cook with charcoal at N200 per bucket of paint than buying 3kg of cooking gas at N2,000 or 12.5kg at N7,500, excluding transportation.

On her part, a resident of Magboro, also in Ogun State, Mrs. Oluwatosin Ajayi said with the increase in the price of cooking gas, she only cooks once in a day and micro-wave the food with electricity in the evening.

Mrs. Rose Okoro, a resident of Ojodu in Lagos described the situation  as worrisome, the rising cost of cooking gas, which she said had made many go back to use of coal and firewood because kerosene was also expensive.

“With the way things are going, the cost of gas may rise to N1, 000 per kilogram by end of the year,” she predicted.

At Ketu, also in Lagos, Mrs. Charity Amos, said many of her neighbours had resorted to the use of charcoal pots without considering the health implications because they could no longer afford gas.

A resident of Ogba, Mr. Femi Aliu, said the increase in the price of cooking gas had affected the price of a plate of food sold to customers by food vendors.

A gas retailer in Abule-Egba, Mrs. Pat Okafor, said: “They also called us that the price has increased from the depot. So we don’t have any choice than to jack up the price. It is what we bought that we are selling.”

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