The Nigerian National Petroleum Company Limited (NNPCL) has assured Nigerians that there is no imminent increase in the cost of Premium Motor Spirit, PMS, popularly known as petrol.
NNPCL urged Nigerians to disregard unfounded rumours and assured them that there are no plans for an upward review of the PMS price.
This was disclosed in a terse statement by NNPCL Chief Corporate Communications Officer, Olufemi O. Soneye, on Thursday.
According to Soneye: “The Nigerian National Petroleum Company (NNPC) Ltd. assures the public that there is no imminent increase in the cost of Premium Motor Spirit (PMS), commonly known as petrol.
“NNPC Ltd. urges Nigerians to disregard unfounded rumours and assures them that there are no plans for an upward review of the PMS price.
“Motorists nationwide are advised against engaging in panic buying, as there is presently ample availability of PMS across the country.”
Meanwhile, Nigerians are feeling the heat, not just from their stoves, but from their wallets as the price of Liquefied Petroleum Gas (LPG), commonly known as cooking gas, has skyrocketed to N1,300 per kilogram.
This sharp increase, up from less than N500 in 2018, has sent shockwaves through households nationwide, adding another layer of burden to an already strained population.
Frustration and anger simmer alongside meals as citizens grapple with the rising cost.
“How can we cook?” lamented Tosin Adelakun, a Lagos resident juggling multiple jobs to support her family. “Everything is going up, but our salaries stay the same. Now even cooking basic meals is becoming a luxury.”
The price hike isn’t just a pinch, it’s a punch to the gut for many Nigerians who rely on LPG for their daily cooking needs.
Street food vendors, who depend on gas for their mobile kitchens, are facing reduced profits and difficult choices.
“We either raise prices and risk losing customers or cut corners on portion sizes, which hurts everyone,” said Peace Okey, who sells cooked noodles at Oshodi, Lagos.
Although Nigeria boasts of over 200 trillion cbf of natural gas reserves which puts her among the top ten countries with the largest gas reserves in the world, low investment has resulted in her being an importer of LPG
Experts point to a complex interplay of factors behind the surge. The ongoing global energy crisis, coupled with the devaluation of the Naira, has pushed up international LPG prices.
Additionally, local challenges like limited storage capacity and transportation hurdles are exacerbating the issue.
Olatunbosun Oladapo, the President of the Nigerian Association of Liquefied Petroleum Gas Marketers (NALPGAM), declined to disclose to BusinessDay the specific prices his members are encountering at the source.
“In the current situation, I can verify that the cost of cooking gas has risen,” said Oladapo. “The situation is very unfortunate because prices are rising and Nigerian consumers are struggling.”
Dan Kunle, an expert in natural gas, elucidated that the escalation in cooking gas prices is a predictable outcome owing to the notable surge in demand for this essential commodity.
“The insufficiency in gas exploration investments and the pervasive issue of crude oil theft, which directly affects associated gas production, have steered the nation’s attention towards seeking an alternative solution—importing Liquefied Petroleum Gas (LPG),” Kunle said.
Adeola Adenikinju, a professor of economics and president of the Nigerian Economic Society said “The current inflationary pressure and skyrocketing prices of imported consumables have exacerbated by the Naira exchange rate to the dollar, making some of these imported items unaffordable by the masses”.
Adenikinju asked the government to also extend waivers to end users’ equipment like burners and cylinders to facilitate the transition to LPG.
“But, the overall objective should be to promote self-sufficiency in LPG consumption and even for exports. The current situation in the energy sector where we are net importers of refined products should not be normalised. Once we can meet local demand, the government can reinstate the VAT and customs duty on imported LPG,” he noted.
Nigeria’s Ministry of Finance in a letter dated November 28, 2023, said the President Bola Tinubu-led government aims to bring down the cost of cooking gas across the country, with the removal VAT and customs duty on the product.
The letter partly reads: “In line with His Excellency, President Bola Tinubu’s commitment to improving the investment climate in Nigeria, increasing the supply of LPG to meet local demand, reducing market prices and promoting clean cooking practices, I hereby affirm Presidential directive dated July 29, 2022, with reference number PRES/88/MPR/99.
“Accordingly, the importation of LPG utilizing HS Codes 2711.12.00.00, 2711.13.00.00 and 2711.19.00.00 is exempt from Import Duty and Value-Added Tax. Consequently, the Importation of LPG shall incur a 0 per cent duty rate and 0 per cent VAT rate, effective immediately.”
