Policy Inconsistency Responsible For LPG Price Hike — Umudu

Posted by Timige, On 9 Nov, 2023 | Updated On 9 Nov, 2023 No Comments »


A former national chairman of Liquefied Petroleum Gas (LPG) Retailers Association of Nigeria, Chika Umudu, has attributed the recent upsurge in the price of LPG to three major factors, including policy inconsistency, which he described as ‘fundamental’.

According to him, besides the fundamental challenge, the other two were contemporary factors.

Umudu said the fundamental factor was the inability of government to evolve a sustainable policy for the development of the country’s gas system, especially the LPG.

“In my own opinion, what the government has been saying in the last 10 years is more rhetoric. I have said it over and over again that all the policies that have come up in this regard are phantom policies.

“As a stakeholder, I have discovered that a policy would come and you won’t see anything on ground to show that there is a commitment towards that policy.

“And sometimes, it appears that some commercial interests are imposing their business models on some people in the public sector in disguise of national interest as regards the LPG,” he said.

He also noted that the activities of marketers in the last couple of years have not helped matters.

According to him, “In the last 10 years, particularly in the last eight years, a combination of some commercial marketers would affirm that they have what it takes to supply all the gas that Nigeria needs as far as LPG is concerned, and that there won’t be any kind of shortage in supply again as they have surmounted all obstacles that will impede supply.

“They would say they had developed all the infrastructure to enable Nigeria to enjoy LPG unbridled, and this false presentation was what led to the government’s proclamation of gas for all Nigerians in 2021 by former President Muhammadu Buhari, meaning that gas is now available to all Nigerians.

“As soon as that policy was officially launched in 2021, I criticised it because I didn’t see anything on the ground to show that Nigeria had come to a stage where the LPG would be readily available at affordable prices.

“Soon after, it became obvious that it was not sustainable as prices moved up from around N3,000 to N10,000 for 12.5kg. It was only in the middle of this year that the price came down to as low as between N5,000 and N8,000, only for it to start rising again and escalated in the last one month to the point that 12.5kg is sold for between N12,000 and N13,000.

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“It means that 1kg is sold for between N1,000 and N1,100, and in some places, it is up to N1,200 at present.

“So, the government does not have a well articulated policy. This is because any policy should be guided by empirical studies and substance; substance of infrastructure, and capacity of the players to actually deliver. None of these is available now as far as I am concerned.

“Business interests can come and change. Any company can claim to have technology, equipment and infrastructure to provide gas for Nigerians, but tomorrow their interest can change to another product. So, that is why it is essential for the government to take charge, especially as it is a developing sector in Nigeria.

“Last year, we had the India-Nigeria Gas Summit on LPG in Abuja. I was still the national chairman then, and it was an expose on how Nigeria can actually develop an LPG policy, taking a lesson from a country that has almost the same developmental challenges like Nigeria in that sector.

“Everybody applauded what we got from the Indians who came, and the government promised to look at it and try to pattern Nigeria’s sector in that direction or even go further in knowing how other developing countries that have achieved efficiency in the sector are doing it so that we can equally marry it together with that of India but nothing has happened since then. These are the fundamental issues; the government’s inability to come up with a policy.”

He also noted that with the removal of petrol subsidy, LPG would have been an alternative energy for those who cannot afford the escalating price of fuel but regretted that even the LPG was becoming more expensive than fuel.

“And it is frustrating a lot of Nigerians because many people have come to embrace the product as a means of domestic energy. It is like leaving them in the middle of the road.

“Nigeria is becoming an urban based society. I don’t have the figure of the number of people living in the urban area or those that live in the rural area, but I know that urbanisation has tremendously grown in recent times.

“Many towns have evolved into big towns. The big towns we know have expanded beyond imagination and the people find it difficult to access other alternative fuels like charcoal and firewood.

“And even accessing firewood and other related energy by those that live in the rural areas raises a concern of environmental issues because our environment that is under threat will be exposed to further incursions, which is not good for our sustainable development planning,” he said.

He, however, lamented that the current crisis has thrown up two challenges, which Nigerians may not know.
The two things, according to him, were the issue of price and availability, stressing that the product was not available and at the same time, the price was high.

On the two contemporary issues that have also contributed to the current price rise, he said: “This present crisis is caused by the devaluation of the naira and inability of the suppliers, especially the Nigeria Liquefied Natural Gas, NLNG, at Bonny in Rivers State to meet up with local demand as well as the inability of other importers to meet up also.”

Source: Leadership

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