Connect with us

Economy

Price of 12.5kg cooking gas soars to N8,500

 

—-as marketers warn it may hit N10,000 by December

 

The price of the 12.5 kilogramme of Liquefied Petroleum Gas,( LPG) or cooking gas, has continued to soar in an unprecedented manner as it has now hit N8,500 in many parts of the country.

This was despite the Federal Government’s plan to make the product appealing to the common man.

The government earlier this year launched the National Gas Expansion Programme,( NGEP,) to drive increased utilisation of gas as a better alternative for petroleum fuel for homes, industries and automobiles.

The 12kg of LPG sold for N7,000 in September and below N4,000 last year.

The high price of the product since about three months ago is caused by a supply gap following a drop in importation as the government imposed an import tax on cargo arriving in the country.

Of the 1.2 million metric tonnes, MT, of the product required for consumption in the country, the Nigeria LNG Limited, NLNG, supplies about 450,000MT while independent marketers supply 750,000MT through imports.

The Federal Government’s GEP was designed to make gas more attractive and accessible to the masses, thereby increasing its usage for cooking, transportation, and in industries.

However, despite this plan, prices of cooking gas have kept soaring in recent months, from about N3,500 last December to between N8,000 and N8,500 as at October, this month.

Investigations showed that the landing cost of the product has since skyrocketed as a result of a recent crisis in the foreign exchange market and the imposition of a new tax.

The Petroleum Products Pricing Regulatory Agency, (PPPRA), said out of the 85,264.80MT of LPG consumed in the country in August, 38,040.46MT were imported.

This puts the level of importation at 55.39 per cent versus 44.61 per cent supplied locally.

Further data showed that 21,606.30MT was imported from the United States, while 13,044.266 was imported from Algeria and 12,573.779MT was brought in from Equatorial Guinea.

Recent reports had marketers warning that the price of 12.5kg of the product could hit N10,000 by December if pending concerns were not addressed.

Marketers have debunked inflating prices, passing the buck of rising prices to the NLNG.

On the other hand, the NLNG claimed that marketers lacked enough infrastructure to take up its cooking gas supply, a claim also refuted by the marketers.

The Marketing Manager, NLNG, Austin Ogbogbo, had said: “NLNG has grown its capacity from 50,000 metric tonnes per annum to 450,000 metric tonnes per annum of LPG in the past 14 years.

“Nigeria needs 1.2 million metric tonnes per annum, but even the 450,000 we produce cannot be absorbed by the market’s current infrastructure.”

When asked if the NLNG’s position was true, the National Chairman, Liquefied Petroleum Gas Retailers Association of Nigeria, Michael Umudu, replied in the negative.

He said: “Marketers have the capacity to absorb the 1.2 million metric tonnes annually and this figure will continue to increase.

“Marketers have the capacity; rather, the challenges of the NLNG have to do with logistics. Many depots use to be empty for months; so, why should they say marketers don’t have capacity?”

According to Ubuntu, storage of cooking gas does not end in the midstream facilities, with inland facilities such as gas plants and retail outlets having more storage capacities.

“This is how it works: LPG is discharged in a depot, and LPG trucks are ready to load products to plants. From the plants, retailers refill their cylinders and store in their shops while end-users buy.

“This means that a depot of 5,000MT storage capacity can do a turnover of 15,000MT a month or even more. So, looking at the estimated 1.2 million MT yearly demand, it shows that if NLNG supplies only 100,000MT a month, then the 1.2 million MT target is met,” he said.

He added: “If the depot of 5,000MT storage capacity can do 15,000MT a month, then calculating other depots with even much more capacities and multiplying by three for a month turnover, you will realise that these depots would do up to 150,000MT monthly.

“And going by the 1.2 million MT annual consumption demand, we only consume about 100,000MT a month. So why should NLNG say there is not enough storage?”

The gas retailers’ chairman noted that the NLNG or any other supplier did not need to supply the annual need at once, adding that this was why he called for the improvement of logistics by the LPG producer.

“With respect to logistics, if they (NLNG) can adapt to compatible vessels and engage enough of the vessels, then more than 1.2 million MT annual estimate would be conveniently met,” Umudu added.

Reacting to the position of the marketers, the spokesperson of the NLNG, Eyono Fatayi-Williams, said the gas firm could only give 450,000MT at the moment to the domestic market.

She also observed that there were challenges with logistics, such as the delay of vessels at the Lagos port, but stressed that the NLNG was doing its best to deliver its part in the supply of cooking gas.

She explained that in 2007, Nigeria could only produce 50,000MT of LPG and that the NLNG was asked to intervene, stressing that the gas firm was primarily set up for export.

“Between 2007 and now, because we have guaranteed supply, the market has grown. Today, Nigeria can take over one million tonnes of cooking gas,” Fatayi-William said.

She added: “The maximum production we have of cooking gas is 450,000 metric tonnes annually and the market did over a million metric tonnes last year.

“Also, when we talk about logistics, the maximum amount we can now give, which is the maximum production volume, is less than what the entire country needs. We are not the only producer of LPG but we can only give 450,000MT.”

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published.

Economy

Auditor General indicts MTN  over evasion of Customs duty since 2021

 

—–as House of Reps knocks FIRS over operational infractions

The Office of the Auditor General of Federation has indicted the telecom giant, MTN, over evasion of payment of Customs duties since 2021.

This was contained in the 2019 queries issued by the office of the Auditor General of the Federation which was made available to the House of Representatives Committee on Public Accounts.
The committee also heard that the Federal Inland Revenue Service, (FIRS)  received capital allowances claims by taxpayers without the certificate of acceptance from the ministry of trade and industries in 2019.

Speaking at the resumed hearing of the investigations on queries issued by the office of the Auditor General of the Federation against the Ministries, Departments and Agencies, (MDAs) of the Federal Government, the Chairman of the committee Hon Oluwole Oluwole Oke, lamented the level of external borrowings by the federal government, saying that the committee’s probe of public funds was aimed at curtailing revenue leakages to boost government treasury.

His statement was coming against the backdrop of tax evasion by the telecom service provider, MTN whose current assets stand at N2.68 trillion in the country, yet does not have proof of customs duty over the years.

The lawmakers also decried the issuance of an assets certificate by the Ministry of Trade and investment to the telecommunication firm without first evaluating their assets.

Following the failure of the MTN representative to tender the relevant documents to buttress his position that the company was up to date, the committee resolved to write the Nigeria Customs Service, (NCS) to furnish it with relevant documents, including MTN duty permit so as to ascertain the total amount it owes government since 2001.

Hon Oke, therefore, directed the Clerk of the Committee to write to the Management of the Nigeria Customs Service on the financial indebtedness of the firm to the federal government.

Continue Reading

Economy

AFCFTA, WCO sign MoU to enhance trade in Africa  

The African Continental Free Trade Area (AfCFTA) Secretariat and the World Customs Organisation (WCO) have signed a Memorandum of Understanding (MoU) aimed at operationalising the tariff schedules and ensuring additional free and efficient movement of goods in Africa.

The MoU, which was signed in Brussels, Belgium, on February 15, 2022, by the Secretary-General of the AfCFTA Secretariat, Wamkele Mene and the Secretary-General of the WCO, Kunio Mikuriya, is expected to strengthen the organisational capacity, transparency and effectiveness of African Customs administrations sustainably, through cooperation between both organisations.

The shared goal of both organisations remains to enhance continental trade by eradicating trade barriers through connecting Customs systems, populating the AfCFTA Tariff Book and providing capacity building for Customs officials and administration.

Mene said that “The MoU will improve the partnership between the WCO to and the AfCFTA in ensuring that Customs Administrations are fully equipped to implement the AfCFTA Agreement.”

He further said that good progress has been made since the establishment of the AfCFTA Secretariat, saying that one major milestone is the ratification of Rules of Origin for 87.7 percent of tariff headings agreed upon by 41 of its 54 Member States.

Mene noted that the expectations were high and that communities were eager to start trading under the new Agreement. He acknowledged the WCO’s expertise and role in delivering capacity building in highly-technical areas which were key for implementing the Agreement.

On his part, Dr. Mikuriya highlighted the areas where the WCO could contribute, including customs technical matters such as the Harmonised System, Valuation and Origin, as well as automation, risk management and trade facilitation which will yield economic benefits to the African continent.

He reaffirmed WCO’s commitment to contribute to the regional integration efforts in Africa through customs modernisation.

AfCFTA is the world’s largest free trade area since the formulation of the World Trade Organisation.

 It aims to bring together all 55 member states of the African Union, covering a market of more than 1.2 billion people, including a growing middle class and a combined gross domestic product of $2.6 trillion.
It works towards several objectives, most importantly to create a single market for goods and services, having the potential to boost intra-African trade by 52.3 percent.

WCO is the only intergovernmental organisation focused uniquely on customs matters.

With 184 Members across the globe collectively processing 98 percent of world trade, the WCO is recognised as the voice of the customs community.
It is noted for its expertise in developing global standards, simplifying and harmonising customs procedures, trade security, trade facilitation, customs enforcement and compliance, the Harmonised System goods nomenclature, valuation, origin, and customs capacity building.

The MoU is expected to strengthen the organisational capacity, transparency and effectiveness of African Customs administrations sustainably, through cooperation between both organisations.

The shared goal of both organisations remains to enhance continental trade by eradicating trade barriers through connecting Customs systems, populating the AfCFTA Tariff Book and providing capacity building for Customs officials and administration.
AfCFTA is the world’s largest free trade area since the formulation of the World Trade Organisation. It aims to bring together all 55 member states of the African Union, covering a market of more than 1.2 billion people, including a growing middle class and a combined gross domestic product of $2.6 trillion.

Continue Reading

Economy

NNPC, MRS engage in blame game over importation of toxic fuel

The Nigerian National Petroleum Corporation(NNPC) and MRS, a Major oil marketer, have engaged in a blame game over the importation of adulterated fuel into the country.
The two organisations were locked in trading of accusations and counter-accusations over who was responsible for the importation of the toxic fuel.
Curiously, the NNPC, the sole importer of petroleum products into the country, in an attempt to absolve itself of the national embarrassment, fingered some major oil marketers in the sordid transaction.
The Group Managing Director of NNPC, Mallam Mele Kyari, at a press conference on Wednesday, revealed that MRS, Emadeb/Hyde/AY Maikifi/Brittania-U Consortium, Oando and Duke Oil are the importers of the adulterated fuel.
However,MRS countered the position of the NNPC, accusing the oil corporation of importing the toxic fuel.
In its rebuttal statement on Wednesday, MRS  accused Panama-based Duke Oil, an NNPC agent, of being the direct importer of the adulterated fuel.
The Major Oil marketer denied importing the substandard PMS, stating that importation of fuel into Nigeria was solely the responsibility of Duke Oil on behalf of NNPC, and the contaminated fuel was distributed to various retailing companies.
How the toxic fuel was imported and distributed in Nigeria

Investigation revealed that Duke Oil is a subsidiary of Nigeria National Petroleum Corporation (NNPC), acting as the government agency’s trading arm, which makes the firm the only importer of PMS into Nigeria.

The company was established about 32 years ago during the administration of Gen Ibrahim Babangida, with a registered designation of Sociedad Anonima, which means Anonymous Society.

Sociedad Anonima implies that shareholders of Duke Oil are largely unknown or secret, and its registered base is in Panama, a Central American country known for providing safe haven to money launderers.

Stakeholders have however queried why a government agency such as NNPC should be running a sole trading arm that is operating out of a money laundering country with secret shareholders.

After the importation of the contaminated fuel, it was gathered that OVH, MRS, NIPCO, ARDOVA and TOTAL  received the contaminated fuel from NNPC, after landing in Apapa between the 24th and 30th of January, 2022.

Sources claimed the adulterated fuel was bought by Duke Oil from the international trader, Litasco, and it has 20% methanol, an illegal substance in Nigeria after it was delivered with Motor Tanker (MT) Nord Gainer.

“Following delivery into the tank, it was observed that the product appeared hazy and dark,” MRS claimed.

adding “the product analysis revealed that the PMS discharged by MT Nord Ganier had 20% methanol, which is an illegal substance in Nigeria.

“As a Company, we are aware that alcohol/ethanol is not permitted to be mixed in PMS specification.” The oil and gas company wrote in the filing at the Exchange on Wednesday.

MRS said it has now halted further sales of fuel from its retailing stations and awaits NNPC’s decision on replacing the contaminated fuel.

However, Kyari said the efforts of the NNPC have been to hold back the affected fuel some of which came from Antwerp in Belgium.
He also explained that petrol imported into the country does not include tests to ascertain the level of methanol content.
The NNPC boss however said that the quality of the products as shown in the certificates issues at port of loading in Belgium showed the fuel was in compliance with Nigerian specifications.
Apart from this, he added that GMO, SGS, GeoChem and G&G working as NNPC quality inspectors had carried out tests before the products were discharged showing Nigeria’s standard.

Continue Reading

Trending

%d bloggers like this: