The Federal Government on Thursday said it was setting up measures to guarantee further reduction in the expense of Liquefied Petroleum Gas, prominently called cooking gas.
It disclosed this while responding to the new minimal drop in the expense of cooking gas.
According to discoveries, the cost of 12.5kg LPG has dropped from N8,800 to somewhere in the range of N8400 and N8200. In certain outlets, the cost of the commodity dropped to somewhere in the range of N7,800 and N8,000 as of Thursday.
In November, The PUNCH solely reported that the expense of LPG continued ascending in 2021, hopping by more than 240% among January and October 2021.
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The advancement forced a few LPG clients to move to charcoal or firewood, as consumers of the commodity raised the caution over the determined climb in its cost.
The product had expanded by 240% for 12.5kg, climbing from N3,000 to N10,200 inside the initial 10 months of 2021.
“It is in government’s interest for the price to go down consistently and there are certain initiatives that are being taken at the moment, which hopefully will see to further drops in price regardless of the international cost,” the Programme Manager, National LPG Expansion Implementation Plan, Office of the Vice President, Dayo Adeshina, stated.
When asked to state one of such initiatives, he replied, “The discussions are still ongoing and there are certain things that you can do to stimulate the market which will have an effect. One of them also has to do with storage.”
Around 65% of the LPG is imported into Nigeria, while domestic production accounts for 35%, henceforth the expense of the commodity in the global market influences the cost locally.
Adeshina told our correspondent that the international cost of the LPG had ascended so high in October last year, however plunged towards the finish of 2021 into January 2022, as this additionally added to the new drop in the LPG cost the nation over.
He said,“If you look at the international pricing of the LPG, and that might change again because it is not a fixed price, in January last year, it was $250 per tonne.
“It rose to $875 per tonne by the end of October and started dropping by the end of November into December, and came down to around $500 per tonne at some point but went up again in December to $708 per tonne.”
He added, “Now, as of the third of January this year, that figure is $744 per tonne. So you can see there is a drop from about $800 around November to $700 in January. The issue here is that the price has been fluctuating.
“Yes you have the effects of Customs and the position of the VAT that made people pay tax for what they imported even in 2019 and 2020. Of course, some importers stopped importing, but there is a resolution going on to resolve that aspect.”
Adeshina guaranteed Nigerians that the public authority would concoct extra estimates that would see to a further reduction in cooking gas costs paying little heed to the value change in the global market.
Remarking on the turn of events, the National Chairman, Liquefied Petroleum Gas Retailers Association of Nigeria, Michael Umudu, affirmed the drop in LPG cost, crediting it to the expansion in supply by the NNPC and NLNG.
“Additionally, numerous LPG clients quit utilizing the commodity when the cost continued to increment and this scaled down request tension on cooking gas, subsequently causing an ascent in its accessibility and afterward a progressive drop in value,” he expressed.
Found out if the Federal Government had eliminated the VAT on cooking gas imports, Umudu answered, “It (government) has not been enforcing the expense and has stayed quiet with regards to it, however has not uttered a word about eliminating it. This additionally has helped in value reduction.”
Last month, the Group Managing Director of the Nigerian National Petroleum Company Limited, Mele Kyari, said the NNPC was expanding the inventory of the LPG in a bid to force down its cost.
Kyari said, “Two things are in play. One is the supply in the international market of gas. It moves with the price of every other petroleum product including crude oil and its derivatives.
“So definitely, it is a reflection of what is happening in the international market. However, what we are doing is to increase supply and once supply increases, price will come down