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NLNG/NIMASA crisis pushes up cooking gas price

By on July 2, 2013

The scarcity of Liquefied Petroleum Gas, popularly known as cooking gas, which became noticeable on Friday, worsened on Monday with major plants in Lagos and Ogun states rationing the product and increasing the price.

Our correspondent gathered that the scarcity was due to the debt crisis between the Nigerian NLG Limited and the Nigerian Maritime Administration and Safety Agency, which had fuelled speculations of an imminent crisis in the gas sub sector.

Checks by our correspondent revealed that a 12-kilogramme cylinder of gas, which normally goes for about N3,000, now sells for between N3,300 and N3,400 in Lagos.

Further checks revealed that an NLNG vessel that should have delivered LPG on June 28 had been delayed due to the deepening debt crisis between NIMASA and NLNG, but the vessel is expected to berth in Lagos by the end of the week.

The impending berthing of the vessel is expected to end speculations that the LPG market may be thrown into a fresh round of scarcity owing to delayed supply by NLNG, which is currently battling NIMASA over the $25bn debt.

NLNG said on its website that it was committed to delivering 150,000 tonnes of LPG to the domestic market but that the NIMASA debt crisis had delayed it from supplying the market on time.

NIMASA had blocked NLNG Bonny River Channel on June 22, 2013 and detained three ships belonging to the company, thereby preventing them from accessing or leaving the loading bay.

This culminated in the crisis that began on May 3, 2013 when NIMASA blocked the Bonny channel, preventing entry and exit of NLNG vessels.

The Federal Government had ordered NLNG to pay NIMASA the stipulated levies, with the former subsequently claiming to have paid $20m into NIMASA’s designated account. But it also approached the court to seek judicial pronouncement on the legality or otherwise of the levies and to find a lasting solution to the conflict.

As a result of the crisis, some LPG retailers have increased the product’s prices and triggered off an artificial scarcity.

The Executive Secretary, Nigerian Association of LPG Marketers, Mrs. Omoyemi Makinwa, who spoke with our correspondent on the telephone on Monday, said there was no real scarcity and confirmed that the NIMASA/NLNG crisis might have been responsible for the perceived scarcity.

She assured the public that LPG was available at the depots and that there was no plan to increase the price.

According to her, NAPGAM members, who are depot owners, currently have products and are selling.

She confirmed that the product was, as of Monday morning, available at the PPMC and NIPCO jetties, among other depots.

When contacted, an official of NIPCO, who did not want to be named, confirmed that there was enough cooking gas at the company’s storage facility.

“The product is there. I can confirm that a vessel berthed at the NIPCO jetty in the last two weeks. The product is there,” he said.

Further checks by our correspondent revealed that Techno Oil and Gas, Total and other independent gas depot owners had the product in storage.

Similarly, the National President, Liquefied Petroleum Gas Retailers Association of Nigeria, Mr. Michael Umudu, who spoke with our correspondent on the telephone, confirmed that LPG was available in the market.

Though some LPG retailers, especially outside Lagos, have increased the price, Umudu insisted that over 80 per cent of retailers in Lagos had yet to effect the price increase.

 

 

[Punch]