Cooking gas prices remain high

Author(s): Patience Ogbo

Within the last four weeks there was a dispute between the Nigerian Liquefied Natural Gas company (NLNG) and the Nigerian Maritime and Safety Agency (NIMASA) concerning certain unpaid levies. This affected the distribution of Liquefied Natural Gas (LNG), commonly known as cooking gas, to depots. Consequently, gas was unavailable in many parts of the country during the period and its retail price increased significantly by virtue of the scarcity.

The dispute between NLNG and NIMASA became public on June 21 when NIMASA blocked NLNG cargo at the NLNG Bonny Terminal, disallowing them from entering or leaving the loading bay. NIMASA claimed it did this because NLNG owed it a total of $140 million in levies. The blockade prevented the gas company from distributing the gas by sea to various states in the country, and so the product was unavailable in many regions.

NIMASA blockaded the NLNG for weeks.

NIMASA blockaded the NLNG for weeks.

The federal government soon intervened in the ensuing dispute to mediate a settlement, while NLNG went to court to contest the undisclosed levies, saying that it should be exempted from paying the levies by reason of the NLNG Act.

The Managing Director of the gas company, Babs Omotowa, said: “Our position has nothing to do with how much NLNG is being charged by a relevant agency but by the legality or otherwise of such a charge or levy in order to ensure that all our payments are made within the ambits of what is lawful. As a law abiding company, NLNG has always paid its taxes, including those due after its tax holidays since 2009. It therefore has no issues with the legally required tax payments but with levies from which it is clearly exempt by the NLNG Act ’

NLNG and NIMASA have since settled their row, and the gas company has resumed distribution.

Gas prices remain high

However, users of cooking gas in Lagos and some other states are still getting to pay more for the product. A 12kg cylinder of gas that normally cost about N3,000 now costs around N5,000 in Lagos. Modupe Talabi, a housewife, said she was shocked at the gas station when she was told the price of gas had increased. “I went to buy gas from my regular dealer, but I was shocked when the salesperson told me the price of a 12.5kg cylinder of gas had increased from the N2,900 it cost me a few weeks ago to N5,000,” she said. “And even the four other gas stations I went to were selling at N5,000, too. Eventually I had to call my husband to bring N2,000 so I could buy the gas.”

Most middle class families rely on cooking gas for their meals. The NLNG-NIMASA face off hit them hard.

Most middle class families rely on cooking gas for their meals. The NLNG-NIMASA face off hit them hard.

‘I feel this sharp increase is too much, considering that cooking gas is a by-product from refineries in our oil-rich nation. We ought to be paying less for cooking gas. I’m sad because this has increased our expenses,” she added.

Some people use no other fuel for cooking except the cooking gas, so they have to buy at the current price despite the increase. Titi Oyewale, another housewife, said: “When I refilled my cylinder with gas lately and I learned the price had gone up, there was nothing I could do about it. I had to pay because I had to cook.”

In the meantime some people have responded to the hike in gas price switching to other fuel sources. Khadijat Adedeji said: ‘Now that the price is up, I and my family have to minimise our consumption of the gas. We have to be more economical.” Nike Alagba, another user, said: “I use a kerosene stove and a gas cooker, and so I use my kerosene stove to cook when I cannot get gas or the price is high.”

Gas dealers in the country say they are not responsible for the sharp increase. “I sell gas to make profit,” said Adebola Hakeem, of Lucky Gas. “But if we buy expensive gas, we have to sell expensively too. The price of gas increased sharply in the last couple of weeks. It’s not our fault. We sell as we buy.”

Editor’s note: Tunji Andrews and Adedayo Ademuwagun contributed to this report.


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s