Gas users in Nigeria are facing the grim prospect of higher prices in the coming weeks, as marketers have hinted at an impending price hike. The President of the Nigerian Association of Liquefied Petroleum Gas Marketers, Olatunbosun Oladapo, revealed that a confluence of factors, including rising international prices, high tax rates, vessel prices, forex scarcity, and naira devaluation, is pushing gas prices higher.
Olatunbosun Oladapo, in a recent statement, cautioned gas users to brace themselves for the impact of price increases, which he stated would take effect as early as next week. He pointed out that international gas prices have surged, resulting in higher costs for importation. The increased prices of vessels, coupled with the scarcity of foreign exchange and the devaluation of the naira, have further contributed to the unfavorable environment for gas importation.
The president of the association cited the unfortunate consequence of these factors on consumers, explaining that their purchasing power has decreased significantly. He noted the widespread impact of these developments on various stakeholders in the gas supply chain, from consumers to middlemen and retailers. Olatunbosun Oladapo described the situation as unfortunate, stating that gas consumers are finding it increasingly challenging to afford gas.
In response to the escalating prices and the ensuing economic hardships faced by consumers, Olatunbosun Oladapo called upon the government to intervene. He urged the government to provide palliatives, reduce taxes and levies, and address the burgeoning issues in the gas sector. He particularly emphasized the need to reconsider local taxes, which he argued were exacerbating the challenges faced by consumers.
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Olatunbosun Oladapo highlighted the impact of taxation on gas prices, pointing out that for every 1kg of gas priced at N700, a significant portion goes towards taxes. He stressed the importance of taxing profits instead of products to alleviate the burden on consumers. The president of the Nigerian Association of Liquefied Petroleum Gas Marketers urged his fellow marketers to consider consumers’ situations when determining prices.
This news comes at a time when many Nigerians are already grappling with the aftermath of the removal of fuel subsidies, which led to a sharp increase in the price of fuel. In response, numerous Nigerians turned to gas as an alternative energy source to power their generators. The impending price hikes in the gas sector are likely to deepen concerns among citizens who had opted for gas as a means of coping with the escalating fuel costs.
The global vessel scarcity is also contributing to the impending price hikes in the Nigerian gas market. The scarcity has led to charter rate hikes in the international market, which is expected to have a ripple effect on local prices of Liquified Natural Gas, commonly known as cooking gas, as the demand for heating fuel increases during the winter months.
As Nigerians continue to navigate economic challenges, the forthcoming increase in gas prices adds another layer of concern to an already complex situation. Consumers are left hoping for government intervention to alleviate their plight and ensure access to affordable energy sources.