By Teddy Nwanunobi
As price of liquefied petroleum gas (LPG) also known as cooking gas, spikes further across various parts of the country, indications have emerged that marketers’ inability to off-take 450,000 metric tons per annum (MTPA) of the product allocation is said to be responsible for the supply shortages.
According to a Vanguard report, the price of the product has risen further to N560 per kilogramme, with the popular size, 12.5kg, selling at N7,000.
“The inability of the marketers to off-take the LPG was due to logistics and infrastructure challenges, as well as other factors in the industry”
The new price range indicates 73.1 per cent increase against N256 per kg or N3,200 for 12.5kg recorded in the first quarter of this year.
Making clarification on the situation, the Nigeria LNG Limited (NLNG) said that it is not responsible for the supply shortfall.
The NLNG Marketing Manager, Mr. Austin Ogbogbo, stated that the 450,000MT allocated to the domestic market was the total volume produced annually by the NLNG.
Ogbogbo added that only about 375,000MT was procured by the gas marketers.
“The inability of the marketers to off-take the LPG was due to logistics and infrastructure challenges, as well as other factors in the industry. NLNG supplied over 80 per cent of its LPG sales (butane/cooking gas) to the Nigerian market and was therefore prioritising the domestic market.
“NLNG’s current maximum butane production can only meet about 40 per cent of the domestic market demand. The balance was supplied by other domestic producers or via imports because NLNG’s production alone was not sufficient,” he said.
Ogbogbo, however, expressed optimism that NLNG would increase its production capacity by 35 per cent with the completion of Train 7, which will, in turn, boost domestic supply.
He said NLNG was primarily an export company that produces 22 MTPA of Liquefied Natural Gas (LNG) and five MTPA of Natural Gas Liquids (NGLs).
Ogbogbo said the company was also working to supply LNG to the domestic market from 2022 to boost power supply and industrial development across the country.
Meanwhile, the National Bureau of Statistics (NBS) in its latest report on LPG price watch, stated that, the average price for the refilling of a 12.5kg cylinder for cooking gas increased by 2.09 per cent month-on-month and by 9.14 per cent year-on-year to N4,514.82 in August 2021 from N4,422.32 in July 2021.