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Cooking gas: Price hike sparks fears of scarcity

Lagos residents queue for cooking gas

The drop in the supply of Liquefied Petroleum Gas, otherwise known as cooking gas, has led to an increase in the retail price of the commodity, raising fears of an imminent scarcity in many parts of the country. Efforts to ascertain the cause of the sudden drop in supply has not been successful. However, LPG retailers have confirmed that the reduction in supply actually led to increment in gas price within a space of two weeks. Our correspondents take a look at the situation in some cities.

 

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In the last two weeks, the price of cooking gas has been on the increase in Jos, Plateau State capital, but our correspondent observed that the commodity is not scarce.

While the product is available in almost all gas stations and retailers visited by Daily Trust correspondent, it was observed that despite the price increment, residents of Jos still patronize the product.

At Sargent Global oil and Gas, located along Bauchi Road, Jos, our correspondent gathered that the price of cooking gas rose substantially in the last two weeks and there are fears that it may continue to rise.

Abubakar Muhammad, who refills at the station,  said N12.5kg cylinders that used to be refilled at N3,400 now cost N4,000 while 8kg cylinders which was refilled at N2,250 two weeks ago is now refilled at N2,700.

Muhammad told our correspondent that they were forced to increase their price after the gas dealers they bought from adjusted their price.

Alex Osibor, a road side retailer, also narrated a similar situation to Daily Trust. He explained that last week, he refilled a 50kg cylinder at the price of N12, 200 instead of the N10, 800 he bought previously.

He said 1kg of gas which used to be sold at N280 is now N340 for reasons not known to them.

“I can’t say if the price hike is a deliberate strategy ahead of the Christmas season. What they told us is that the price has increased so we also have to increase our price but people are still buying because you know it is much cheaper to use gas than kerosene,” he said.

Osibor also explained that there are signs that the price could rise again because some dealers are beginning to horde the product. He stressed that “as at last year, 12.5kg cylinders were refilled at N4,000 or even N4,500 but by the middle of this year, the price crashed to N3,400 for 12.5kg or even N3,000 in some stations, so as long as the price is not beyond N4,000, I think people will still buy,” he said.

In Kano, Daily Trust observed that although the cooking gas is available in the state but its price has increased.

Malam Isma’il Muhammad, a regular buyer of cooking gas, said a 12.5kg cylinder is now N3500 as against its former price of N3, 000.

Muhammad added that a 10kg cylinder that was sold for N2,400 is now N2,800.

He said, “I was surprised when a dealer told me about the new price of 10kg cylinder when I went to Hadejia Road yesterday to buy it.

Alhaji Idris Bello, a resident of Gyadi-Gyadi, also confirmed the availability of cooking gas in Gyadi-Gyadi and environs.

Our reporter, who went round some shops where the commodity is being sold in Badawa Layout, Tarauni, Maiduguri road and Wudil Road, observed that virtually all the shops visited have enough cooking gas.

A dealer along Maiduguri Road, Alhaji Haruna Isa, said the increase in the price was necessary, as one cannot sustain the business without price increase.

“There is no way one can sustain the business without increasing the price. We should thank God that the product is still available, otherwise the situation would have been worse.”

In Owerri, the Imo State capital, operators of LPG stations are expressing doubt of a steady supply of gas as Christmas approaches.

Manager of Neetabel LPG Plant, Mr. Precious Okere, told our correspondent that the price of gas has started going up because of the scarcity, forcing them to sell only to end users and not dealers.

According to him, what was initially perceived as government intervention in the price was because a lot of ships berthed at the port at the same time and that created a glut, which resulted in serious competition and ultimately resulted in a downward adjustment in price.

He said, “Government deceived us that they have reduced the price of gas, whereas what we discovered was that a lot of ships brought gas at the same time, which created competition. Now, the gas is finished and no ship has been able to bring any gas. This has created the situation we are in now.”

Okere said that a 12.5kg cylinder that was sold for N3.500 now sells at N3.700, with the likelihood of further increase if the situation continued.

At Empire Energy, an official who spoke anonymously hinted at further increase in the price of gas. According to him, presently gas dealers from Lagos go to Port Harcourt to source for the products because there is none in Lagos.

A visit to selected gas refilling points in Lagos Mainland revealed that the prices have remained relatively stable.

At the NNPC filling station along Ojodu Berger Road, the price has remained unchanged with 6kg going for N1500 and 12.5kg selling for N3000. At another refilling station in Ketu, CMD Road, the price has remained unchanged in the last couple of months.

At the Ogas point located within Oando filling station in Ogba, the price has also remained stable.

A customer, Mrs. Roseline Agada at another refilling point at Ogba area said: “I have heard about the likely hike, but there are many retail points here and anyone who attempts an increase may just lose its customers to others.

“We see some small variations with independent dispensers especially when you run out of gas on a weekend when the organized refilling points are not open.”

A check at two independent refilling points located outside the traditional fuel stations revealed between N300 and N500 difference in their prices compared with those refilling points located within the premises of fuel stations.

One of such retailers at Iju-Ishaga, who prefers anonymity, said: “our competitors who are located in the fuel stations enjoy shared facilities like water and power at a cheap rate but we provide our water, power and dedicated security outfits. All these cost money, hence the little variation you may have noticed.

“Do not also forget that we take the risk of locating our plants close to residential areas, thereby saving them the cost of driving a distance to refill at fuel stations which are traditionally located along the highways.”

 

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