The Nigerian Association of Liquefied Petroleum Gas Marketers (NALPGAM) has blamed ‘portfolio investors’ for the high cost of cooking gas.
The president of the association, Oladapo Olatunbosun, disclosed this on Tuesday while appearing before a joint committee of the House of Representatives investigating the prices of diesel and gas.
Mr Olatunbosun said the government, through the NLNG, has been injecting sufficient gas into the market but middlemen, who are aiming to maximise profits, are responsible for the steep price.
However, contrary to Mr Olatunbosun’s claim, sources at the NLNG told PREMIUM TIMES that although the company now supplies all its petroleum gas to the Nigerian market, it meets only about half the local needs of Nigerians. The rest is imported, which is currently affected by the global oil crisis.
On Tuesday, Mr Olatunbosun also said the federal government removed VAT from the sector to maintain price stability but the middlemen continue to maximise profit by as much as 100 per cent.
He said the steep increase in the price of gas is driving consumers away from using gas, thereby moving to charcoal which harms the environment.
“The only way to stimulate investment is to make the price affordable. There are infrastructural challenges, but there are still human interventions that we need we need to control.
“Supply should be directly to people that need it. How many gas plant owners are actually off-takers. There are production going on in Edo in Oredo. How many of them are they selling? People come from different angles who are portfolio investors, they buy gas and they hack on it, the price goes up,” he said.
He called for more investment in the sector to meet demand and also crash the price.
“In the long run, what Nigeria needs to do is to invite investors to invest simply in exploration. We have an abundant deposit of gas in the soil but the exploration is too low for the population,” he said.
After his presentation, the lawmakers had a closed-door session with the marketers, the Group Managing Director of NNPC Limited, Mele Kyari and others.
The average retail price of 10kg cooking gas increased by 89.28 per cent from N2,071.69 in May 2021 to N3,921.35 in May 2022, according to data by the Nigerian Bureau of Statistics.