Nigeria Liquefied Natural Gas Limited (NLNG) has absolved itself of responsibility for the rising cost of liquefied petroleum gas (LPG), also known as cooking gas in Nigeria.
The company blamed it on the interplay of factors, including the exchange rate of the naira to the dollar, because 60% of the domestic LPG requirement is imported while the NLNG provides only 40%.
The cost of domestic gas has risen by over 50% from about N600 per kg to about N1,200 in the past six months, sparking national outrage and condemnation.
But In a statement signed by Andy Odeh, General Manager, External Relations and Sustainable Development of the NLNG, and made available to our correspondent Wednesday evening, the company dismissed media reports insinuating that a price hike by the company was responsible for the surge in the price of cooking gas.
It described the reports as speculative and indicative of a fundamental misunderstanding of Nigeria’s intricate market dynamics.
The NLNG explained, “The domestic LPG market, like any other, is subject to dynamic market forces and various external factors.
Such factors as changes in exchange rates, escalating price benchmarks mirroring crude oil prices, and the Panama Canal drought-induced vessel scarcity impacting transport costs, especially for imported LPG, have had a significant effect on energy prices in recent times and could undoubtedly be some of the reasons for recent price hikes witnessed in the domestic market.
The statement added that NLNG had been making defining contributions to the domestic LPG market, “spurring the steady growth of the nation’s DLPG market volume from less than 50,000 metric tonnes of imported LPG in 2007 to over 1.3 million metric tonnes of both domestic and imported LPG today”.
“NLNG currently delivers over 450,000 metric tonnes per year of butane, the main product in cooking gas, and has embarked on domestic propane supply to further grow the market”.
According to the statement, the company had committed its entire butane and propane production to the domestic market in 2023 and, despite feed gas challenges, continued to supply LPG to the domestic market, accounting for approximately 40% of the total market volume.
It went on: “Since the beginning of the year, NLNG has delivered over 380,000 metric tonnes of LPG using the company’s dedicated LPG vessel.
“NLNG has remained committed to delivering domestic LPG to locations as close to the market as possible by diversifying delivery points, starting with Lagos in 2023, fostering competition among terminal owners, and ultimately reducing consumer supply chain costs.
Efforts are ongoing to reach terminals in Warri and Calabar as soon as the challenges limiting the safe delivery of volumes to these other locations are cleared.
“NLNG maintains an unwavering commitment to ensuring the reliable supply of its LPG production to the domestic market at prices that are reflective of the market.
“The company is collaborating with relevant industry stakeholders to achieve this objective and will remain focused on achieving its mission through this avenue, among others”.
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