Workers idle at a cooking gas plant in Lagos
Nigerian consumers, especially caterers and housewives have reacted positively to the sharp drop in the prices of cooking gas in the last few days, Business Hallmark can report.
Checks revealed that the average price of cooking gas declined by about 90 per cent in the last one week owing to several factors.
For instance, a 12kg cylinder which sold for between N9,200 and N13,100 in May, now sells from N6,350 to N6,950 within Lagos and neighbouring Ogun State.
While a 6kg measurement currently goes for N3,175 on average, a kilogram sells for N530, about N270 difference in price.
Meanwhile, while consumers are joyous over the continued fall in the prices of LPG, marketers are lamenting their loses.
Chinedu Orji, a cooking gas seller on Fadehan Street in Ijaiye-Ojokoro, explains that many traders had believed that a kilogram of LPG would be sold for as high as N1,000 after the election season but were left disappointed as things did not go as anticipated.
“Before the presidential and governorship elections, we bought the product in millions (kilogram) and stored them in cylinders to take advantage of the transition season, but with the low demand and the body language of the new president, major suppliers were forced to flood the market with the commodity, thereby crashing prices.
“I know of a colleague who purchased and stored 1,000 50kg cylinders loaded with cooking gas and was waiting for elections to pass to sell and make profit, but now he is pleading that I buy from him at N36,000 per cylinder.
“Though the price he was offering me is ridiculously low, I can’t take the risk as prices are coming down every minute”, Orji lamented.
Consumers on the other hand are happy with the downward trend in price, hoping that it will continue.
A Lagosian, Wale Adedayo, on Sunday, shared a receipt for a 12.5kg cylinder cooking gas he purchased on June 1.
According to the receipt, he bought the commodity at N6,950, translating to N556 per kilogram.
“12.5kg of cooking cas in May – N9375. 12.5kg of cooking gas in June – N6,950. Maybe, just maybe we should speak out when prices go down too. This feels good,” Adedayo enthused.
Consumer analysts who spoke on the sharp drop in LPG prices attributed it to several factors, especially the positive reaction of the petroleum and gas industry to the new administration of Bola Ahmed Tinubu.
According to Dr. Peju Bernard, a consumer analyst, Corporate Nigeria responded positively to the coming in of the new administration and the actions it took in the last few days.
“I can reliably tell you that speculations of a downward crash in the prices of cooking gas are rife among importers and traders of the commodity.
“There is a growing fear among players in the LPG sector that the new administration will fully liberalise the sector to allow more competition which is expected to bring down the price of the commodity.
“That, I learnt, triggered the rush to sell off the stocks they have in their storage tanks before prices drop below the actual landing and profit margins.
“What this implies is that the current prices are the actual prices Nigerians should be buying.
“And this is just a reaction. If the Tinubu administration goes ahead to do some ‘house cleaning’ as promised, we should expect further crash in the prices of LPG.
“But a shot of warning! All businessmen are like vultures. They are very patient and waiting to see the moves of the new president.
“If he (President Tinubu) fails to quickly take decisive actions on the economy or rise up to the occasion as widely expected, the vultures (marketers) will go back to their racketeering and continue business as usual”, she warned.