Hope ahead as NIPCO CEO reveals key strategies to cut cooking gas costs

Legit.ng journalist Victor Enengedi has over a decade's experience covering Energy, MSMEs, Technology and the stock market.

The Managing Director and CEO of NIPCO Plc, Mr. Suresh Kumar, has outlined key measures needed to reduce the cost of Liquefied Petroleum Gas (LPG), commonly known as cooking gas, in Nigeria.

He gave the hints while speaking at the 2024 National Conference of the Nigerian Association of Liquefied Petroleum Gas Marketers (NALPGAM), themed “Sustainable Energy Growth in Nigeria – LPG and the Future.”

NIPCO boss noted that as more companies enter the gas processing industry, consumers can expect market stabilization soon. Photo credit - KT Express, SME Guide
Source: UGC

The National Bureau of Statistics data showed that the average retail price for refilling a 5kg cylinder of Liquefied Petroleum Gas (cooking gas) increased to N6,699.63 in September 2024.

NIPCO boss outlines path to cheaper cooking gas

Kumar stated that the key to reducing the rising cost of cooking gas lies in supporting local refineries, such as the Dangote Refinery, to enhance domestic gas production.

He emphasized that with local refineries, including Dangote Refinery, now purchasing crude oil in Nigerian currency, local LPG production is expected to rise, leading to a decrease in prices.

Kumar said:

“It is crucial for the government to back these refineries in their efforts to significantly increase LPG output. This will drive down retail prices and make the product more accessible to Nigerians.“There is hope that the reliance on imported LPG will decrease, which will positively influence the prices at which the product is sold domestically. Greater local production will make LPG more affordable since it reduces exposure to foreign exchange fluctuations and international pricing dynamics.”

Kumar pointed out that the demand for LPG in Nigeria has remained relatively flat due to its high cost, which has hindered growth in consumption.

He noted that as more companies enter the gas processing industry, consumers can expect market stabilization soon.

It is worth noting that for years, Nigerians have expressed dissatisfaction with the recurring hikes in the price of cooking gas and how hardship in the country has persisted.

Kumar expressed optimism about the future of the LPG market, particularly with President Bola Ahmed Tinubu's administration implementing significant fiscal measures to reduce product costs.

He added that if these efforts succeed, and raw materials like steel for cylinder production are adequately addressed, the cost of LPG for household cooking could become more affordable.

Marketers identify cabal behind rising cooking gas price

Meanwhile, Legit.ng earlier reported that cooking gas marketers, under the Nigerian Association of Liquefied Petroleum Gas Marketers (NALPGAM), have blamed Liquefied Petroleum Gas (LPG) terminal operators for the high cost of cooking gas in the country.

Oladapo Olatubosun, the association's president, disclosed this when they met the Senate Committee on Gas in the company of the group members.

They say the operators buy the commodity at a cheap rate from the federal government and sell to the marketers at a high cost.

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Source: Legit.ng