How sharp practices and port delays will the worsen gas crisis

Fresh facts have emerged on how some storage facilities’ owners among the petroleum marketing companies and the Nigerian Ports Authority (NPA) are contributing to the ongoing scarcity and attendant hike in price of liquefied petroleum gas (LPG) commonly known as cooking gas.

It has been said that some of the oil marketing companies affiliated to the Major Oil Marketers Association of Nigeria (MOMAN) have formed a cartel where they now engage in acts that are distorting the LPG market.

For the past year, the price of LPG has been on the rise, with current refilling price rising by more than 100 percent, largely because of the scarcity of the product, occasioned by unavailability of foreign exchange for importation, naira devaluation and rising inflation.

Other factors include excessive arbitrary charges by government agencies, and the newly-added 7.5 percent VAT to the basket of marketers’ charges.

Nigeria currently consumes about 1.2mt of LPG, with Nigeria LNG currently supplying 450,000mt to the market, while marketers are left to import the remaining 750,000mt.

A 6-kilogram LPG refilling unit now costs between N3,400 and N4000, while that of a 12.5kg refilling unit costs between N6,750 to N8000, depending on the part of the country the transaction is done.

However, the scarcity and price hike have been compounded by the new cartel formed by the oil marketing companies, resulting in the inability of the “last mile” LPG marketers to get the product from the terminal owners.

An industry source said that members of MOMAN, who are in the cartel, now reject supply from the Nigeria LNG Limited, using insufficient storage capacity as their excuse. He said those in the group prefer white petroleum products like kerosene, diesel and petrol to LPG, adding that when they manage to receive supply from the NLNG, they sell to customers at the same price they sell imported products.

Assistant general manager, corporate and strategic communications, NPA, Ibrahim Nasiru, debunked the claim on the delay of NLNG’S LPG vessel at the Apapa Port, which the company had said partly contributes to why the Nigerian market was not able to take all of the 450,000mt.

He said: “Whoever is telling you that NPA is the cause of any delays on LPG vessels berthing is economical with the truth. We have one of the fastest turnaround times.”

The marketing manager, NLNG, Austin Ogbogbo, said that because of certain logistics, only about 375,000mt of the company’s dedicated 450,000mt LPG supply was being taken by the domestic market.