Market News

By Waliat Musa

Cooking gas scarcity looms across the country as the price of the commodity hits an all-time high of N1,000 per kilogramme (kg) from N750.

The sudden surge in gas prices has left many Nigerians scrambling for alternative means to cook, and experts warn that the current shortage could lead to a full-blown crisis, if not urgently addressed.

The surge in price has been attributed to convergence of many factors, like the weak naira, limited bulk storage, scattered terminals across Lagos, Edo, Delta and Cross Rivers.

The Guardian findings revealed that long queues for cooking gas at filling stations have resurfaced in some parts of Lagos, Ogun as consumers find it difficult to purchase the product, while the product is still being sold at N850 per kg in Kwara and Osun State as at the time of filing this report.

Experts have said companies importing the product are hoarding it, in speculation of price increase.

The scarcity of vessels to transport the product in the international market has influenced the cost of chartering vessels, and the projection that the coming winter will drive prices up.

According to Spark Commodities, in a report by Bloomberg, the cost of chartering a vessel is $70,500 per day. Due to the scarcity, the rate is expected to rise to $206,750 per day this month and $284,750 per day in November.

The Nigerian Association of Liquefied Petroleum Gas Marketers (NALPGAM) had in August 2023 said there is a possibility of a surge in the price of cooking gas due to the hike in the foreign exchange rate and activities in the international market.

The association said rising international prices, high tax rates, prices of vessels, forex scarcity and naira devaluation were some of the reasons for the price review.

Speaking with The Guardian, President (NALPGAM), Olatunbosun Oladapo, said the government needs to improve on local supply of the product and checkmate the role of middlemen, terminal operators to avoid capitalising on exchange rate.

Chief Executive Officer, Diary Hills Limited, Kelvin Emmanuel, in a chat with The Guardian, said the demand for cooking gas by Nigerians to power their generators and cars is raising the consumption per capita.

Speaking on the long-term effect of the scarcity on Nigeria’s economy, Emmanuel said: “The long term effect of scarcity because of the shortage of bulk storage terminals, companies in the midstream importing product are hoarding for the purposes of price speculation and FX volatility, is that prices will continue to rise per KG.”

In a chat with The Guardian, a gas retailer in Lagos, Memunat Alao, said many companies are hoarding the products with speculations that the price would go higher than N1,000 per kg.

Another Consumer in Ogun State, Idayat Bakare told The Guardian that as at October 1, 2023, it was still available but at the rate of N1,000 per kg, but the commodity became very scarce the second day as she couldn’t purchase it the previous day due to the long queue.

Partner, PwC, Habeeb Jaiyeola, said whatever happens in a global market is expected locally as he encouraged more stakeholders to get into the business.

He urged the government to leverage on more supply, hence the prices will go down and cushion the effect of the hike by making impacts in other areas to ease the situation.