The Nigerian Association of Liquefied Petroleum Gas Marketers (NALPGAM) says some retailers are exploiting a current supply shortage to hike the price of liquefied petroleum gas (LPG), also known as cooking gas.
Oladapo Olatunbosun, the association’s national president, spoke on Wednesday during Channels Television’s ‘The Morning Brief’.
LPG is used for cooking and fuelling vehicles.
Olatunbosun clarified that the price of the product has not been officially increased.
“But I must say categorically that the price of gas has not gone up. No increment has been done officially,” he said.
“What is happening is that people are catching up on the little shortage in supply and the market forces that have made the demand go up higher than the available quantity.
“They are catching up on it to make good money, which is wrong. We frown at this as an association and I’m happy by the grace of God Almighty that in the next few days, normalcy will come.”
He added that Nigerians would continue to enjoy cooking gas at reasonable prices once the supply situation stabilises.
‘LPG Is Scarce Because Of Inconsistent Supply, PENGASSAN Strike’
Speaking further, Olatunbosun explained that the “artificial” scarcity of LPG resulted from inconsistent supply by the Dangote refinery, compounded by the strike action embarked upon by the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN).
He said Dangote refinery previously sold LPG to around 50 trucks each day — enough to cater to consumers in the south-west and some northern regions.
“Add it to what we get from Apapa and other depots in Lagos, because they (marketers) also source their products from international oil companies (IOCs) and other producers and so on,” Olatunbosun said.
“So Dangote came in with his own strategy, selling directly to off-takers that actually do business and the chain of distributors was shortened.”
He explained that this development made the landing cost reasonable, adding that it rendered importation unattractive since importers could not compete effectively.
“But at the time, Dangote also commenced renovation/maintenance, which actually delayed loading. There was a time that trucks were spending about 13 to 14 days in Dangote yard before they could get products,” Olatunbosun said.
“That was a lag which actually which impeded the flow of gas into the society. But after that, people switched to Apapa. So Apapa also ramped up stock.
“Nobody felt the impact then because Apapa was like a stand by, and people were buying from there. Apparently, the stock that they were not able to sell before, they got people to buy when there was a delay in Dangote refinery’s loading. We passed that stage when Dangote refinery finished the renovation.”
However, he explained that the PENGASSAN strike prevented vessels from being offloaded at the depots, as there were no officials available to carry out inspections.
“They (Dangote refinery) didn’t stop their production but everybody had rushed to Apapa. Apapa then didn’t have products. All the depots in Apapa were dry,” Olatunbosun said.
He added that it caused three to five days’ loss.
“That five days showed the real impact on the backlog that we had experienced from irregular flow from Dangote refinery. The only option that marketers had was also to dry out, and they could not get a new supply,” the association’s president said.
However, Olatunbosun noted that the situation has improved and is expected to get better over the weekend as new vessels carrying the product arrive.
