In the face of skyrocketing cooking gas prices, Nigerian consumers are turning to alternative energy sources, with dealers reporting a significant drop in demand for Liquified Petroleum Gas (LPG). Despite efforts by the Nigerian government and the Liquified Natural Gas Limited (NLNG) to stabilize the market, low income and poor purchasing power are driving consumers to seek cost-effective solutions.
According to retailers, the demand for the traditional 12.5kg gas cylinder has sharply declined, with consumers opting for smaller sizes (5kg, 6kg, or 3kg) to save costs. Additionally, many have shifted to alternative energy sources like kerosene and charcoal. The current market prices for a 12.5kg cylinder range between N11,000 and N12,000, reflecting the economic strain on households.
Dapo Olatunbosun, President of the Nigerian Association of Petroleum and Gas Marketers, acknowledged the government’s efforts to ensure local gas supply through NLNG but highlighted that despite the price stabilization at N16 million per 20 metric tons, falling demand persists due to people’s low income and poor purchasing power. Olatunbosun stated, “Every depot is wet now. Supply is better. Price is stable at N16m per 20 metric tons – it could have been worse.”
However, a warning looms as marketers attribute potential future increases to depot owners, cautioning that the 12.5kg gas cylinder could reach as high as N18,000 by December without intervention.
NLNG, responding to accusations, absolved itself of responsibility for the price surge, pointing to factors such as foreign exchange rates and freighting costs as primary contributors. The NLNG Train-7, a facility currently 52% completed, could potentially handle 22 million tonnes of the product annually, offering a prospect for increased supply.
Depot operators counter that the rise in product prices is linked to fluctuations in foreign exchange and the international market. As the government, NLNG, and market players navigate these challenges, consumers are left grappling with the impact on their daily lives and seeking more affordable energy alternatives.