Cooking Gas Price Skyrockets to N1,400 Per Kg: Reasons and Consumer Impact

2025-02-05

In recent times, Nigerians have been grappling with an alarming surge in the price of cooking gas, reaching a staggering N1,400 per kilogram in some cities. This hike is causing widespread concern, particularly as the holiday season approaches. Key stakeholders, including Nigeria Liquefied Natural Gas Limited (NLNG), have cited multiple factors behind the surge, including a volatile foreign exchange market, fluctuating global oil prices, and a shortage of vessels needed for transportation. These issues have led to a limited supply of Liquefied Petroleum Gas (LPG) in the domestic market, raising the price further and causing concern for consumers. As cooking gas becomes increasingly unaffordable, many are turning to alternatives, fearing an even steeper increase in prices in the near future.

Summary

The recent hike in cooking gas prices in Nigeria is attributed to a series of interconnected factors. Key contributors include:

Rising Import Taxes and Costs: High import taxes and the devaluation of the naira are pushing the prices up.
Surge in Crude Oil Prices: International crude oil prices have been steadily rising, affecting the LPG market.
Fluctuating Exchange Rates: The unstable forex market has made it more difficult for LPG to be imported affordably.
Shipping Issues: The scarcity of vessels, partially due to a drought affecting the Panama Canal, has also increased transport costs.
Domestic LPG Market Dynamics: The availability of Liquefied Petroleum Gas in Nigeria has decreased due to these factors, leading to a scarcity in major cities such as Lagos, Kano, and Delta.

The price of a 12.5kg cylinder has spiked, with predictions that it could rise as high as N18,000 in the near future. This situation has caused widespread dissatisfaction among consumers, with many struggling to afford cooking gas.

What Undercode Says: Analyzing the Situation

The recent surge in cooking gas prices in Nigeria is a result of a complex interplay of global and domestic factors, leaving consumers in a dire situation. To truly understand the implications of this crisis, we must consider both the short-term and long-term impacts on Nigeria’s economy and its citizens.

The Role of International Markets

One of the significant drivers of the price increase is the global energy market, particularly the price of crude oil. Nigeria, like many other countries, relies on the importation of cooking gas, and the price of LPG is heavily influenced by global oil price fluctuations. With crude oil prices on an upward trajectory, the cost of LPG follows suit. While Nigeria is a major oil producer, the country’s dependency on imports for certain refined petroleum products, including cooking gas, exacerbates the impact of global market changes.

Forex Crisis and Exchange Rate Fluctuations

Another contributing factor is the volatile exchange rate in Nigeria. The devaluation of the naira against major currencies has made it increasingly expensive for importers to bring in cooking gas. As exchange rates shift unpredictably, Nigerian consumers are forced to bear the brunt of these costs. The high exchange rate also affects the purchasing power of individuals and businesses, leaving them struggling to keep up with the rising costs of everyday goods.

Domestic Supply Challenges

Despite these external pressures, domestic factors play a crucial role in the price increase. Nigeria Liquefied Natural Gas Limited (NLNG) has cited a shortage of vessels and a constrained supply of feed gas as key obstacles. The scarcity of transportation vessels, particularly impacted by the drought in the Panama Canal, has caused delays in deliveries and increased shipping costs. Additionally, the domestic supply of LPG has been further hampered by production and distribution issues, driving up the price.

The Impact on Nigerian Consumers

For everyday Nigerians, the consequences of these price hikes are severe. Many families rely on cooking gas for their daily needs, and with prices climbing to unaffordable levels, they are being forced to turn to alternatives like kerosene or firewood. This shift not only has environmental implications but also increases the risk of health hazards associated with traditional cooking methods. The government must take immediate steps to address the issue, as the economic hardship faced by citizens is palpable.

Calls for Government Intervention

As the price of cooking gas continues to rise, industry leaders, including Olatunbosun Oladapo, President of the Nigerian Association of Liquefied Petroleum Gas Marketers (NALPGM), have called on the Nigerian government to intervene. The proposed measures include reducing taxes and levies, which are seen as exacerbating the crisis. Without governmental support, experts warn that the price of a 12.5kg cooking gas cylinder could reach as high as N18,000 by December, further straining Nigerian households.

In conclusion, the current rise in cooking gas prices is a multifaceted issue that highlights Nigeria’s vulnerability to both global market forces and domestic economic challenges. While external factors like crude oil prices and exchange rate fluctuations are difficult to control, the Nigerian government must take decisive action to ensure that citizens are not left to bear the brunt of these challenges alone. Whether through tax reductions, improved domestic production, or subsidies, the government has a responsibility to stabilize the LPG market and alleviate the burden on Nigerian consumers.

References:

Reported By: https://www.legit.ng/business-economy/technology/1563305-everybody-crying-cooking-gas-price-rises-n1200-kg-nlng-give-reasons/
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