NLNG indicts PPMC, NAVGAS over cooking gas price hike

 The Nigerian Liquefied Natural Gas Limited (NLNG) at the weekend said it is not to blame for the recent hike in price of Liquefied Petroleum Gas (LPG) also known as cooking gas, to N4000 for the 12.5kg cylinder.

Recently, marketers raised an alarm over the artificial hike in price of the product from N2.4 million per 20 metric tonnes to N3.5 million.

Executive Secretary of the marketers under the aegis of the Nigerian Association of LPG Marketers, Mr. Bassey Essien, revealed in Lagos at the weekend that with the artificial hike in the price of 20 Metric tonne cylinder, the price of 12.5kg cylinder had gone up from N2, 700 to between N3, 500 and N4, 000.

Essien called on the Federal Government to intervene and stop the hike, adding that unlike the prices of other petroleum products, which are paid in dollars, the price of LPG is not paid in dollars, hence there was no reason for the price hike.

According to him, the Nigeria LNG Limited, which supplies LPG to the domestic market, collects Naira from the marketers.

He further argued that the current scarcity of foreign exchange in the country has no effect on LPG because the product is produced locally and not imported.

He accused some officials of the Pipelines and Products Marketing Company (PPMC), a subsidiary of the NNPC and one of the LPG marketers, NAVGAS of conniving to hike the price of LPG supplied by NLNG.

According to Essien, the PPMC officials diverted the NLNG’s LPG vessel to NAVGAS terminal instead of allowing it to discharge at PPMC jetty for all the marketers to receive supply.

“Gas is supposed to be readily available in all the major terminals in Lagos but today, only one company has gas because some people have hijacked the NLNG domestic supply scheme. On Thursday last week, they increased the price from N2.4 million per 20 MT to N2.6 million. On Friday, it was increased to N3 million and on Monday, it was increased to N3.5 million and if nothing is done, they will increase it to N4 million. The company did the same thing last year to exploit Nigerians when it was the only company that had LPG but when other companies received product, it quickly crashed the price to N1.9 million,” he explained.

Speaking with the Business Times, General Manager, External Relations (NLNG), said the company’s intervention in the LPG domestic market in 2007, was to ensure that the product is not only available but affordable.

“For the same reason, NLNG increased its commitment to the domestic market from 150,000 metric tonnes per annum (mtpa) to 250,000 mtpa.

“This has contributed significantly to an increase in LPG consumption by Nigerians and growth in investments in the industry”, he said.

According to him, NLNG’s contributions has not stopped retailers from hiking prices at their will and caprices.

“Despite these achievements, the market remains fraught with challenges and bottlenecks at the retail end of the LPG value chain, which NLNG has no control over”, he said.

He said the retail market is controlled by Pipelines and Products Marketing Company (PPMC), a subsidiary of the NNPC and the LPG marketers, NAVGAS, accusing them of price hike of products supplied by NLNG.

“The entire domestic market for example, is served via only two LPG receiving facilities/jetties (PPMC NOJ & NAVGAS), both of which are in Lagos. Such a situation is inadequate and has led to distortions, product scarcity and anti-competitive behaviour”, he said.

Kudo Eresia-Eke said the company knows about the irregularities and would do all to make the product available and affordable.

“NLNG is aware of these imbalances and remains committed to supporting LPG availability and affordability. The company continues to consult with stakeholders to improve efficiencies, remove bottlenecks, identify the challenges limiting growth as well as develop strategies that will deepen and grow the industry,‎” he said.

When contacted, the Managing Director of NAVGAS, Mr. Ian Brown told Business Times that the hike was due to the current situation in the country, stressing that the market size of LPG in Nigeria is 300,000MT, while NLNG supplies less than 200,000MT.

However, Essien insisted that NAVGAS is using deregulation to create artificial scarcity and hike price.