The cost of cooking gas has risen by over 100 per cent within a period of eight months as the Federal Government implemented a 7.5 per cent tax on the imported commodity.
The use of Liquefied Petroleum Gas, popularly called cooking gas, is on the rise but experts fear the increase may force many users to resort to firewood and charcoal, to the detriment of the environment.
Read Also: Gov. Ganduje opposes legalisation of cannabis as Marwa visits Kano
Operators said Nigeria imports about 70 per cent of the commodity, while the rest was mainly supplied by the Nigeria Liquefied Natural Gas company.
The government implemented the VAT on LPG imports about three weeks ago and some dealers were also mandated to pay the tax for commodities imported several months ago, according to a report by The Punch.
The cost of a 12.5kg of cooking gas that sold for about N3,500 in December 2020 had jumped to as high as N6,800 in parts of Abuja.
A resident along the Lagos-Ibadan road said she bought the commodity on Sunday at N7,200 in Lagos, as dealers projected that the cost might hit N10,000 in December this year, the paper reported.
The National Chairman, Liquefied Petroleum Gas Retailers Association of Nigeria, Michael Umudu, said: “There are three major factors to the hike in prices. Firstly, about 70 per cent of the gas we consume in Nigeria is imported and importers have to contend with the high cost of foreign exchange.
“Secondly, there is a rise in the price of petroleum products in the international market and because of that, the cost of LPG has equally gone up. So importers now pay more on imports.
“And thirdly, the government added VAT on imported LPG about three weeks ago. It (VAT) was 7.5 per cent of the cost of the commodity and this exacerbated the price hike of cooking gas in the past three weeks.”
Umudu stated that before the introduction of VAT, foreign exchange and cost of petroleum products in the international market had been the factors causing the rise in price.
“Around November/December last year, 12.5kg was sold at about N3,500, but in July it went up to around N5,500 and when VAT was introduced about three weeks ago, it now escalated to about N6,500 and above,” he stated.
Umudu added, “The price hike seems to be happening on a daily basis and nobody can tell when it will stop. There has been a lot of appeal to the government to find a way of persuading NLNG to increase its domestic supply so that the product can be affordable.
“NLNG supplies about 35 per cent of the gas we consume locally and that percentage is not adequate. And the gas sold by NLNG is even sold at international price and is priced in dollar not naira.”
