President of the Nigerian Association of Liquefied Petroleum Gas Marketers (NALPGAM), Oladapo Olatunbosun, while appearing before a joint committee of the House of Representatives investigating the prices of diesel and gas 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.
But contrary to Olatunbosun’s claim, sources at the NLNG told newsmen 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.
Olatunbosun also revealed that the federal government removal of VAT from the sector was meant to drive price stability but the continued effort to maximise profit by middlemen is as high 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 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 Oredo, Edo. 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.
Newsmen reported how 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.