Cooking Gas, Aviation Fuel Price Drops Amidst Subsidy Removal Crisis

By Moses Patience Chat

The price of Liquified Natural Gas (LPG) otherwise known as cooking gas and aviation fuel has dropped despite the removal of fuel subsidy which has increased the prices of commodities and services in Nigeria.

Valuechain learnt that the price of cooking gas with 12.5 kg has crashed from about N14,000 to N6,950 in Lagos and about N8,000 in other states as at yesterday while that of aviation fuel known as Jet A1 has dropped from N800 to N650 in Lagos with slight differences in other states, few weeks after fuel subsidy was removed 

According to Oga Adejo-Ogiri, the Executive Secretary (ES) of the Association of Local Distributors of Gas, LPG is an international commodity, with about 65 percent of domestic gas coming from imported sources and prices in the country are linked to an international benchmark called Mont Belvieu, which has been on the downward slope for the last couple of months.

Also, an Energy Expert, Mr Olusesan Okunade, during an interview with journalists stated that there was no correlation with the crash in prices of cooking gas and jet fuel, adding that it is just a play out of the forces of demand and supply.

In his own words, “I think it is just the forces of demand and supply that are working on the gas which we talked about in terms of liberalization. I am sure because there is no fund in circulation, people are not buying so much. So there is supply, rather than wasting the resources, you will rather dispose at a very minimal margin. There is no gimmick for what is happening. I learned as of yesterday that it is about N6,950. It has no correlation with fuel subsidy.

“To the best of my knowledge, I have not heard anything being responsible for this. People just want to dispose of those things, and sell at a minimal margin as against when we were buying it N12,000, N13,000.

“For Jet A1, the demand is on the high side, people are still traveling. It is a specialized fuel for airlines. I have not heard anything special that they have done but I don’t think it is in correlation with removal of fuel subsidy.”

Also speaking, an economic analyst, Mr. Babatunde Adeniji said the supply may be more than demand with Jet A1 as well and that “sometimes the situation when these products are ordered is different from when they arrive.”