Federal Government has said it has no control over the pricing of Liquefied Petroleum Gas, also known as cooking gas, saying the product is already fully deregulated in the country.
Minister of State for Petroleum Resources, Mr Timipre Sylva, who disclosed this during a chat with State House Correspondents, Tuesday, noted , however, that President Muhammadu Buhari is worried about the hike in the price of the commodity.
The who minister was at the Presidential Villa, Abuja to introduce to President Buhari the chief executive officers of both the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), Engr. Faruk Ahmed and the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Engr. Gbenga Komolafe, informed that gas prices are determined by the global market, even though he indicated that government will everything possible to bring down the price especially during the Yuletide season.
“We must understand that cooking gas is not subsidized. It is already a deregulated commodity. So the price of cooking gas is not determined by the government or by everybody in the industry. In fact, gas prices are determined internationally.
“And you all are aware that in Europe, today, gas prices have gone up. There was even a crisis in Europe relating to gas prices. So the pricing of gas internationally now affects also the price of gas in the country.
“Apart from that, there are some issues around VAT charges on imported gas, and of course, taxes on imported gas, which we are handling. But of course, quite frankly, these taxes on imported gas, you must also juxtapose it side by side with the local producers of gas.
“So, if you incentivize the importance too much, then you will also kill the local industry. And also, you don’t want to incentivize the local industry at the expense of the imports, because if incentivize the local industry at the expense of the imports, then you will not have enough gas produced within the country.
“So, these are the issues of balancing that the midstream and downstream regulatory authority are handling and I want to assure you that we are quite concerned.
“Mr. President also is very concerned. He is aware that the price of gas is high in the market, and we’re doing everything trying to see how we can bring down the price of gas especially as we approached the Yuletide.”
Investigations have shown that the cost of the product increased by 240 per cent for 12.5kg, jumping from N3, 000 to N10,200 between January and October.
About 65 per cent of LPG is imported into Nigeria, while domestic production accounts for 35 per cent, hence the halt in imports could further shoot up cooking gas price if the situation is not addressed.
Executive Secretary, Nigerian Association of Liquefied Petroleum Gas Marketers, Bassey Essien the reintroduction of customs duty and Value Added Tax on imported LPG were the basic reasons for the halt in its imports by importers.
He stated that there were several other issues and stressed that if the halt in LPG imports should drag further, the supply of the commodity domestically could suffer severe drop.
This came as NALPGAM in an open letter to the Minister of State for Petroleum Resources, Chief Timipre Sylva, urged the minister to urgently intervene in the skyrocketing price of LPG in Nigeria.
The open letter was signed by the National President, NALPGAM, Olatunbosun Oladapo, and Essien. NALPGAM is the umbrella body of operators of LPG bottling plants licensed by the statutorily empowered government agencies to carry out the business of safe bottling of cooking gas.
Essien stated that due to the fears expressed by importers who had stopped importation of LPG into the country, cooking gas sourced from the Nigeria Liquefied Natural Gas company was now selling in the region of N11m per 20 metric tonnes truck.