Gas prices increase by 122% while household incomes decline

According to data from the Nigerian Bureau of Statistics, the cost of refilling a 12.5kg cylinder of liquefied petroleum gas, also known as cooking gas, increased by 122% from N4,422 in July 2021 to N250bn, part of the Federal Government’s intervention funds on the National Gas Expansion Plan, which aims to increase usage across the country.
According to the Bureau’s most recent report, an examination of state profiles found that Ebonyi had the highest average retail price for filling a 12.5kg cylinder at N11,212, followed by Delta and Ekiti at N10,926 and N10,883, respectively.
On the other hand, Katsina had the lowest average price, at N8,355. Yobe and Kano were next, with N8,383 and N8,614, respectively.
A zone-by-zone analysis revealed that the South-West had the highest average retail price, at N10,334, followed by the South-South, at N10,239, and the North-East, at N9,139.
More than 70% of Nigeria’s 200 million people lack access to clean cooking fuels, according to Group Chief Executive Officer of Nigerian National Petroleum Corporation Mele Kyari.
The Federal Government began implementing the N250 billion intervention fund for the NGEP in August 2021 after the Central Bank of Nigeria launched it in August 2020.
The fund was intended to provide funding for the construction of small-scale petrochemical and gas cylinder manufacturing facilities, as well as compressed natural gas plants.
Nigeria now possesses 206.53 TCF of proven gas reserves, with aspirations to increase those reserves to 600 TCF.
Households are struggling as a result of rising inflation and diminishing earnings. The bulk of importers and manufacturers acquire their dollars from the parallel market, where the dollar-to-naira exchange rate is above N670/$ and inflation is close to 20%. According to the NBS, household incomes fell for 67% of households in August 2020 compared to 2019.
Since then, the statistics authority has not provided information on household incomes, but experts say that the rising inflation is a sign that incomes are losing value in Africa’s most populous country.
Professor of economics at Olabisi Onabanjo University and academic economist from Nigeria, Sheriffdeen Tella, claimed that government action was urgently required to lower product costs for the benefit of the underprivileged masses.
“The astronomical increase in the price of cooking gas will further aggravate poverty situation in the country. Cooking gas is not a luxury, it is a necessity. It is bad enough that we are grappling with high food inflation, and now there is an additional burden of an escalating cost of means of cooking the food. So, for the average Nigerians and the poor, this is an added burden, and obviously, the impact on poverty will be very profound. It has implications for hunger, food security, and things like this have a way of creating social tension in the country.
“Many households have even resorted to the use of firewood, charcoal, and all of these are not consistent with the current policy on deforestation, and climate change. So, it is very important that urgent steps are taken to intervene in bringing down the cost. This is particularly very important because of the impact of the high cost on the poor,” he said.

GOGAN Media.