Despite various efforts by the Federal Government to enhance supply and encourage local consumption, the demand for cooking gas, or Liquefied Petroleum Gas (LPG), has witnessed a decline.
Gas retailers said that the drop in demand is attributable to the “low income and poor purchasing power” of consumers. A retailer in Isolo, Akinleye, mentioned that consumers are now showing reduced interest due to the inflationary pressures that have elevated prices beyond the affordability of the average individual.
John, another seller in Oke-Afa, highlighted that consumers are opting for smaller quantities, with many shifting to 5kg or 6kg cylinders and supplementing their cooking needs with alternative methods like kerosene and charcoal.
A market survey unveiled that prices for a 12.5kg cylinder now range between N11,000 and N12,000, depending on the location.
Dapo Olatunbosun, the President of the Nigerian Association of Petroleum and Gas Marketers, acknowledged the consistency in local supplies due to interventions by the Federal Government, particularly through the Nigerian Liquefied Natural Gas Limited. While prices have stabilized, Olatunbosun expressed concern that consumer demand is not meeting expectations, attributing this to the prevailing low income and weak purchasing power.
He noted that despite the stability in prices at N16 million per 20 metric tons, demand is diminishing. Olatunbosun anticipates a slight increase in demand in December but does not expect a significant rise compared to previous years.
Olatunbosun previously raised alarm that the price of a 12.5kg cylinder of cooking gas might reach N18,000 by December if the government didn’t intervene to address continuous price hikes by middlemen. As of the latest update, he stated that government intervention has stabilized local supplies, and prices are expected to remain steady, possibly falling in December.
The report also highlighted that the Nigerian Liquefied Natural Gas Limited plans to shut down its plant in Finima, Bonny Island, Rivers State, for routine maintenance in early 2024.
Olatunbosun concluded by emphasizing that even though cooking gas is considered a luxury product, affordability could improve if the price of a 12.5kg cylinder were around N5000. He expressed optimism that continued monitoring by their association would prevent unjustified price increases. The recent increase in prices, as reported in October, prompted an emergency meeting with the Nigerian Midstream and Downstream Petroleum Regulatory Authority, signaling government involvement to ensure market stability. Olatunbosun expects prices to begin dropping in the coming weeks.
