The National Bureau of Statistics (NBS) has stated that the average retail price for refilling a 12.5kg cylinder of cooking gas increased by 0.77% on a month-on-month basis from N9,824.07 in July 2022 to N9,899.34 in August 2022 on average.
In some states across the country, the essential commodity sold for as much as N11,225 in August 2022.
This may look like a small increase on a monthly basis until the 101% rise compared to last year is considered. The 5kg cylinder which sold for N2, 215.33 in August 2021, now sells for N 4,456.56 on average.
The rising price is a big burden for the over 9 million Nigerians who use gas for domestic cooking, as it deepens their wallets already stretched by 20.52% inflation rate.
A breakdown of gas prices across Nigeria
12.5kg cylinder
According to the August 2022 liquefied petroleum gas (cooking gas) price watch from the National Bureau of Statistics, in August 2021, cooking gas users paid N4,514.82 for the same 12.5kg cylinder, and when compared with current prices, is a whopping 119.26% increase.
The states with the highest and lowest 12.5kg cylinder refill prices as of August 2022, are as follows;
Lowest prices
5kg cylinder
The average retail price for refilling a 5kg cylinder of cooking gas increased by 1.34% on a month-on-month basis from N4,397.68 in July 2022 to N4,456.56 in August 2022.
According to the cooking gas price watch, in August 2021, cooking gas users paid N2,215.33 for a 5kg cylinder, and when compared with current prices, is a 101.17% increase.
The states with the highest and lowest 5kg cylinder refill prices as of August 2022 are as follows;
5kg cylinder refill from September 2021 to June 2022
The cooking gas price watch report also highlights average cooking gas prices from September 2021 to June 2022. For 5kg cylinder refilling, September 2021 was N2,397.60, October 2021 was 2,627.94, November 2021 was N3,312.42, and December 2021 was N3,594.81.
January 2022 showed N3,657.57, February 2022 was N3,708.58, March 2022 showed N3,778.30, April 2022 was N3,800.47, May 2022 was N3,921.35, and June 2022 showed N4,218.38.
12.5kg cylinder refill from September 2021 to June 2022
The cooking gas price watch report also acc highlights average cooking gas prices from September 2021 to June 2022. For 12.5kg cylinder refilling, September 2021 showed N6,164.97, October 2021 was N6,638.27, November was N7,308.06, and December 2021 was N7,332.04.
January 2022 showed N7,413.25, February 2022 was N7,447.79, March 2022 showed N7,617.71, April 2022 was N8,164.37, May 2022 was N8,726.30, and June 2022 showed N9,485.91.
Why are gas prices rising?
Gbemi Lawson, a Lagos-based retailer told Nairametrics that he believes the high costs of cooking gas prices are mostly due to rising forex rates.
“The exchange rate is negatively impacting imported gas for suppliers, which is affecting prices for the end consumers,” he says.
Cooking gas supplier, Ekene Nwosu, told Nairametrics that Nigeria still does not produce enough domestic LPG, so, some suppliers still need to import cooking gas.
“If you factor in the forex payments, we make on gas imports you will see reasons why cooking gas prices are higher than what obtained in 2021,” Nwosu says.
Sharing some insights into why suppliers have to rely on gas imports, despite Nigeria’s vast natural gas resources, Gas analyst, Ifeanyi Izeze said that Nigeria currently lacks the capacity and infrastructure to process natural gas.
“This is due to gas policy confusion, particularly the pricing templates. Foreign operators are not interested in domestic gas, because current producers are not getting their money back from investments.
“The government should come out with a proper policy, and invest in gas infrastructure, so as to make the process easier for investors and then we can start processing our gas,” Izeze says.
Earlier in the year, the Nigeria Liquefied Natural Gas (NLNG) Limited promised to flood the domestic market with 450,000 metric tons of liquefied petroleum gas also known as cooking gas. This action step was supposed to reduce cooking gas prices for consumers.
Izeze told Nairametrics that the parties involved are not being truthful about this because if they had indeed taken that step, prices would not be increasing either marginally or significantly.
“They are rationing what they give to the domestic market. It seems the government is not serious about domestic gas policies. NLNG has a core mandate which is to produce liquefied natural gas (LNG), not LPG, yet they are focused on exporting LPG, while the domestic market suffers and users pay more for the product.”
“LPG is only a by-product of NLNG operations, not a core product. LPG should be put into the domestic market in its entirety, so, Nigerians can pay less for the gas their country has in abundance,” Izeze added.
Why is cooking gas important?
Liquefied petroleum gas, also known as cooking gas, is a cleaner fuel for cooking than firewood, kerosene stoves, and cow dung. Cooking gas is a safer and more reliable method of cooking because it emits less CO2 into the atmosphere and users are not at risk of inhaling smoke and other harmful gases while making their meals.
Switching to cooking gas from dirty fuels like firewood and cow dung is crucial for Nigeria if the country will meet its energy transition targets for 2060.
The International Energy Agency (IEA) projects that in sub-Saharan African countries, the number of people without access to modern fuels will increase to over 900 million people by 2030 as population growth outstrips the impact of efforts to boost access to clean cooking facilities.
This is why cooking gas prices need to be affordable for all in the country, so, as the general population grows, more people can switch from traditional cooking methods to cooking gas.
Bottomline
In 2021, the Nigerian government implemented a 7.5% tax on imported liquefied petroleum gas, popularly called cooking gas, causing an increase in prices within a period of eight months. However, some stakeholders have said that the government has not started implementing the VAT payment on cooking gas imports.
In any case, forex payments made by suppliers would factor into what suppliers are paying for the gas imports they make. So, end consumers will end up paying more, either way.
