The Nigerian Association of Liquefied Petroleum Gas Marketers has said that it is fully in support of the move by the Dangote Petroleum Refinery to crash the price of cooking gas.
NALPGAM President, Oladapo Olatunbosun, stated this in an interview with Saturday PUNCH. According to him, Alhaji Aliko Dangote’s plan to bring down the price of LPG formed part of the association’s plea over time, saying this would truly reduce the use of firewood for cooking.
Speaking during a recent tour of his refinery by some local and foreign guests, Dangote stressed that the current price of cooking gas is expensive and not affordable for the common people who depend on firewood for cooking.
Addressing members of the Lagos Business School CGEO Africa, at the refinery in Lekki, the President of the Dangote Group said, “Currently, we do LPG of about 2,000 tonnes per day. You know Nigeria is gradually moving to the usage of LPG. But I believe it is expensive, but right now we’re trying to bring down the price and make it cheaper. If the distributors are not trying to bring it down, we’ll go directly and sell to the consumers, so that people will now transition from firewood or kerosene to LPG for cooking.”
While some operators described the plan as monopolistic, Olatunbosun said NALPGAM had been requesting a price cut because of the poor. “Everything Dangote said at that meeting is actually the words of NALPGAM. We are the ones in front, campaigning for lower prices so that the poor Nigerians can use gas.
“They should stop using logs of wood. And those are the presentations we made to people in authority, to the minister and the Special Adviser to the President on Energy. And I guess they had a meeting with Dangote and persuaded Dangote to consider the poor. That’s why Dangote is saying he doesn’t want poor Nigerians to use wood again so that the price will come down,” he said.
However, Olatunbosun acknowledged that people who have built gas storage facilities with loans may have every reason to be scared and worried for their investments.
“If you are in their shoes, you will also exercise that caution, because they built that storage facility with funds that may have a repayment period of about 20 or 15 years. And some of them have not recouped 50 per cent or even 30 per cent of their investments. So, when the price is going to crash and take them out of the market, they have every reason to be agitated and to react.
“But the market is big enough to accommodate everybody. They will also have their own share. There’s a way they can do the market dynamics to favour them. It’s about changing the structure, but nobody whatsoever is against the price coming down,” he maintained.
On direct sale to consumers, Olatunbosun said Dangote would sell directly to retailers and cut out middlemen.
“When we say direct sales, it’s common sense. It’s not that Dangote is going to sell to households or that people will queue with their cylinders in front of his refinery to buy. No, but he will sell directly to the retail marketers and gas plant owners, who have formed associations, and reduce the middlemen, because what made the price go up is the role of the middlemen.
“So it’s the middlemen that he wants to reduce and sell directly to people who are actually taking gas to the doorsteps,” he explained.
The NALPGAM boss emphasised that the majority of Nigerians in villages cannot afford gas at N1,000 per kilogramme. He mentioned that the only way to increase the national gas utilisation is by bringing down the price.
“In Nigeria, it’s only the rich and the middle people who are using gas. We need to get the poor into the net by making gas affordable. As their purchasing power is low, the price should come down. We made an appeal to Dangote. They are the largest producer now in Nigeria. We appealed to them to give part of their profit margin to the poor. Crash the price so that the poor can use gas.
“That is what we advocate. That is our pronouncement as an organisation. We lobby for this. And the man saw reasons in what we are saying because he is always pro-poor. He wants to see how to assist the poor. And that is why he is saying yes, they are thinking to bring the price down so that the poor will stop using firewood,” Olatunbosun submitted.
