Liquefied Petroleum Gas (cooking gas) retailers have raised the alarm over persistent supply shortages, saying fresh LPG shipments into the country have done little to improve availability as prices soar and consumers groan under rising energy costs. The retailers said cooking gas supply remained severely constrained, warning that scarcity and high prices may persist if the government fails to address the situation.
The development comes amid growing complaints from consumers across the country over the rising cost of cooking gas, with neighbourhood retailers in some locations selling the product for as much as N2,400 per kilogramme. In an interview with The PUNCH, the Chairman of the Liquefied Petroleum Gas Retailers Association of Nigeria, Ayobami Olarinoye, said that while supply improved slightly following the arrival of an LPG cargo in late May, marketers and retailers were still struggling to access products.
According to him, the current situation has made it extremely difficult for retailers to obtain gas from plant operators, thereby worsening supply challenges in the downstream market. “The cooking gas situation remains almost the same. Though the supply was a little bit better because a shipment of LPG came in late May (owned by a company I will not like to mention), the price remains high,” Olarinoye said.
He added that another LPG vessel arrived in the country on June 3 but alleged that the product was being reserved for the owner’s retail outlets. “I got information that another ship belonging to another company arrived on June 3. The company has multiple gas stations.
According to my source, the company is saying the shipment is only for their stations and not to be sold to any marketers. If marketers (plant owners/operators) don’t have gas, there is no way LPGAR members (retailers) can get the product to sell,” he said. Describing the situation facing retailers, Olarinoye said access to products had become increasingly difficult in recent weeks.
“Getting the product has been excruciatingly difficult and it is not readily available. Out of every 10 plants, only one or two would have products to sell to our members. Many of them, especially those situated in relatively residential areas, prefer to sell directly to end-users, while a few are still selling to retailers,” he stated.
He warned that prices were unlikely to decline in the immediate term unless there was an intervention. “The high price may remain the way it is until the situation changes positively,” the LPGAR boss noted. Olarinoye also linked part of the supply challenge to the export of locally produced LPG, saying a local refinery sells to the Benin Republic to earn foreign currency.
“We understand a private local refinery is selling most of its product to West African customers in foreign currency, which is more profitable for the company than selling in the local currency,” he added. He called on the Federal Government to create incentives that would encourage more investors to enter the LPG market and boost local supply.
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Also, the government should ensure that terminal owners do not abuse the system by hoarding the product,” he pleaded. The PUNCH reports that retailers in several neighbourhood shops have run out of supply, with the few that have the product selling at exorbitant prices.