By John Ikani
Mallam Mele Kyari, the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), has attributed increase in prices of the cooking gas to challenges in sourcing adequate supply of the commodity.
Kyari Disclosed this during a working visit to the headquarters of the Department of Petroleum Resources (DPR) in Abuja on Tuesday.
“Today, this country is under supplied with gas. I can tell you that we are having difficulty feeding our network across the country with gas, every day, it is a trouble to deliver gas. Once your supply is weak, it will affect pricing,” the NNPC GMD said.
“The supply mechanism of our LPG is very weak, that is why we are collaborating extensively to make sure that we are able to extract LPG from our gas resources so that it is made available to the market. Once supply becomes high, definitely, the price will definitely be impacted,” he added.
The GMD went on to note that the corporation is working with other sister agencies to make sure that more gas is available into the domestic market thus, making it close to homes.
According to him, the strategy to expand its network of availability would subsequently lead to gas directly delivered to homes of end users.
He said: “If we do this, all cylinders will not be of any use. That is why I don’t see them used in many developed countries. When we are able to power thermal gas plants across the country and very close to the users, ultimately, homes will be run with electric cookers and utensils and that way, you will have less need for cylinders. We are transiting and we will continue to add more volume into the market so that we bring down the prices.”
He explained that the excess availability of the commodity would also aid in stabilising power supply and distribution in the country, as thermal plants will supply power generating companies’ gas which are affordable and accessible.
What you should know
Consumers are facing a difficult time, as the price of Liquefied Petroleum Gas, (LPG) otherwise known as cooking gas, has risen by over 33 percent month-on-month, from N360/kg in July to N480/kg in August.
The hike comes on the backdrop of the recent Federal Government’s efforts aimed at promoting more use of gas in Nigeria and its declaration of 2021-2030 as Nigeria’s decade of gas, meaning more demand for the commodity.
Explaining reasons behind the hike to newsmen, the Nigerian Association of Liquefied Petroleum Gas Marketers, (NALPGAM) said it was due to Federal Government’s re-imposition of Value Added Tax (VAT) on imported LPG.
According to NALPGAM’s Executive Secretary, Bassey Essien: “It is unfortunate that the Federal Inland Revenue Service and the Federal Ministry of Finance have gone to resuscitate a product that has been exempted and gazetted from VAT.
“This was gazetted in 2019 and has encouraged domestic gas utilisation. Nigerians are already complaining about the prices of cooking gas across the country, and this would further worsen the situation”.