Business
Cooking gas prices soar by 114% as naira continues to devalue
The price of Liquefied Petroleum Gas (LPG), commonly known as cooking gas, has surged dramatically from N700 per kilogram in June 2023 to N1,500 per kilogram in October 2024, according to a report by The PUNCH.
This represents a staggering 114% increase in just 16 months, a period coinciding with President Bola Tinubu’s administration.
The sharp rise in LPG prices is attributed to the devaluation of the naira, as the product is priced in U.S. dollars.
Since the floating of the naira under Tinubu’s economic reforms, the exchange rate has worsened, with the naira plummeting from less than N700 to around N1,700 against the dollar.
Suresh Kumar, the Managing Director and Chief Executive Officer of NIPCO Plc, pointed out that over 60% of the cooking gas consumed in Nigeria is imported, making it heavily dependent on exchange rates.
Speaking at the 2024 National Conference of the Nigerian Association of Liquefied Petroleum Gas Marketers in Lagos, Kumar noted that domestic LPG production remains insufficient to meet demand.
He urged the Federal Government to incentivize Chevron and other companies to convert more propane into LPG, which could help stabilize prices.
“Currently, less than 40 per cent of the 1.5 million metric tonnes consumed domestically is produced locally. This is why the government must encourage companies like Chevron to convert more of their propane output into butane, which is more suitable for domestic use,” he explained.
READ ALSO: NBS reports significant rise in cooking gas prices
Our correspondent observes that given the fluctuating exchange rate and the country’s reliance on imports, there are concerns that the price of cooking gas may continue to rise.
According to a report by the National Bureau of Statistics, the average retail price for refilling a 5kg cylinder of Liquefied Petroleum Gas increased by 4.19 per cent on a month-on-month basis from N6,430.02 recorded in August 2024 to N6,699.63 in September 2024.
On a year-on-year basis, this increased by 59.90 per cent from N4,189.96 in September 2023.
*On state profile analysis, Rivers recorded the highest average price for refilling a 5kg cylinder of cooking gas with N7,285.71, followed by Gombe with N7,271.88, and Borno with N7,089.72,” the NBS said.
On the other hand, Kebbi was said to have recorded the lowest price at N5,950, followed by Kano and Benue with N6,133 and N6,143 respectively.
“In addition, analysis by zone showed that the North-East recorded the highest average retail price for refilling a 5kg cylinder of Liquefied Petroleum Gas with N6,929.02, followed by the South-East with N6,893.47 while the North-West recorded the lowest with N6,382.30,” the report noted.
The report added that the average retail price for refilling a 12.5kg cylinder of cooking gas increased by 4.89 per cent on a month-on-month basis from N15,552 in August 2024 to N16,313 in September 2024.
“On a year-on-year basis, this rose by 76.41 per cent from N9,247.40 in September 2023. On state profile analysis, Rivers recorded the highest average retail price for the refilling of a 12.5kg cylinder of Liquefied Petroleum Gas with N17,993 followed by Gombe with N17,943 and Zamfara with N17,475.
“Conversely, the lowest average price was recorded in Adamawa with N13,983, followed by Nassarawa and Bauchi with N14,938 and N15,000 respectively.
“Analysis by zone showed that the South-East recorded the highest average retail price for refilling a 12.5kg cylinder of Liquefied Petroleum Gas with N16,957, followed by the South-West with N16,665 while the North-East recorded the lowest price with N15,770.75,” the NBS report added.
The PUNCH reports that the price of LPG has continued to increase from around N300/kg in 2017, to about N1,500 in October 2024
This, coupled with the hardship being experienced as a result of fuel subsidy removal and the floating of the naira, has caused Nigerians to resort to the traditional ways of cooking with firewood.
There are concerns that the rise in the price of cooking gas may hinder the country’s efforts to achieve clean cooking and reduce tree felling.
The Executive Director and Chief Financial Officer of Heirs Energies, Samuel Nwanze, Nigeria needs $7.5bn to achieve clean cooking by 2030.
The Commissioner for Environment in Ogun State, Ola Oresanya, once told one of our correspondents that many might resort to charcoal for cooking if the price of LPG continues to rise.
The International Energy Agency said no fewer than 500,000 African women die prematurely each year from cooking with firewood, charcoal, or stove.
The IEA said African women and their children lose their lives due to lack of access to clean cooking.
“Women and children are being disproportionately impacted by the lack of energy access, particularly to clean cooking.
“It is estimated that 500,000 women die prematurely every year in Africa due to the lack of access to clean cooking.
“Women can spend up to four hours a day, just collecting the firewood, robbing them of their time and preventing their educational and professional aspirations,” the IEA stated.
(Punch)