Forex and Infrastructural constraints exacerbates Nigeria’s LPG market troubles

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Challenges relating to foreign exchange and infrastructure may encourage the continuous rise of Liquefied Petroleum Gas (LPG), otherwise called cooking gas in Nigeria. If the issues persist, more Nigerians may be forced to revert to unclean energy sources like firewood.

In an interview with Guardian Nigeria, the Executive Secretary, National Association of Liquefied Petroleum Gas Marketers, Bassey Essien said since the LPG market is deregulated, it means its price is determined by the prevailing exchange rate of the Naira to the United Sates Dollar.

According to Essien, “though we produce LPG locally, it is very unfortunate that the price of both the locally produced and the imported product, is determined by the prevailing exchange rate”. He also noted that “for the fact that our refineries are not working well, Nigeria cannot help the situation. Internally, we have to depend on the LPG provided by Nigeria LNG Limited, which is priced internationally”.

Essien added that “though the issues of global oil price and weather are relevant factors, the weak Naira exchange to the dollar, remains a major concern”.

The National Chairman of Liquefied Petroleum Gas Retailers, Chika Umudu, who also complained about the bad state of the market said “considering the peculiarities of the Nigerian market, LPG price will continue to rise unless we resort to good planning backed by infrastructural development”.

Umudu noted that “the use of LPG is actually slowing down, areas like Lagos, Abuja, Port Harcourt, among others are affected”. He said governments in other countries intervene to prevent industries from plummeting and added that it was a shame Nigeria is watching the LPG industry sink.

Chika Umudu warned that things would continue to get worse ‘if LPG stakeholders don’t improve their planning strategy for the industry”. He added that “we need to develop infrastructure; government should continue to show interest in the sector”.

 

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