Expert Explains Why Cooking Gas is Expensive Despite FG's Special Efforts to Crash Prices

Expert Explains Why Cooking Gas is Expensive Despite FG's Special Efforts to Crash Prices

  • Nigerians are paying more for cooking gas refills despite government efforts to reduce the price
  • New data from the National Bureau of Statistics revealed that the average price of cooking gas for 12kg has increased to over N10,000
  • An expert has provided insight into why government efforts seem not to be working to bring down the price

The cost of Liquified Petroleum Gas (LPG), also known as cooking gas, has increased across the country, adding more pressure on Nigerian households.

The latest data from the National Bureau of Statistics showed that the average price of 5kg of cooking gas increased from N4,562.51 in October 2023 to N4,828.18 in November 2023.

Cooking gas prices in Nigeria
Cooking gas 12kg refill now above N10,000 Photo credit: SS
Source: Facebook

Meanwhile, the average cost of refilling a 12.5kg cooking gas increased by 5.78% on a month-on-month basis, rising from N10,545.87 in October 2023 to N11,155.15 in November 2023.

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FG's efforts to crash cooking gas prices

The increase comes despite the federal government's policy to make cooking gas cheaper for citizens. had earlier reported that the federal government announced the removal of customs duty and Value-Added Tax (VAT) on the importation of LPG and its associated equipment.

This was contained in a letter dated November 28, 2023, signed by Wale Edun, the minister of finance and coordinating minister of the economy.

Also, the minister of state for petroleum resources (Gas), Ekperikpe Ekpo, constituted a committee and mandated them to recommend the best way to boost supplies and crash LPG prices, following the rise in prices in recent months from about N700 per kg to above N900 per keg in parts of the country.

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Economist explains why there is no impact yet

Speaking on the price changes, Dr Ayo Anthony, an economist, explained that it will take time for government policies to impact the economy.

He explained that the delay in seeing government policies materialise before the Yuletide was caused by what was referred to as inside and outside lag.

His words:

"In the field of economics, we refer to a concept known as "lag." This term signifies the delay involved in government policy coming into effect, encompassing both inside and outside lag.
"Inside lag denotes the duration necessary for the government to determine when an issue arises. It's not an immediate response when a problem emerges; rather, there's a period before the government takes action.
"Hence, the timeframe taken by the government or policymakers to make choices in response to an economic problem or shock is termed inside lag. On the other hand, outside lag refers to the duration required for the decision to be put into action."

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Anthony said the issue of old gas stock was a contributing factor to the high cost of cooking gas in the Yuletide, despite the government's policy to remove VAT from its importation.

He said cooking gas that marketers had stocked before the policy pronouncement would still be sold during the Yuletide at the old price to cover the cost of importation.

He added:

“The seller plans to set the selling price to account for the cost of importing the gas. They will maintain this price until their existing stock is used up. Once they restock at the prevailing price aligned with the new government policy, they will then adjust the selling price to reflect a reduction in VAT"

Cabal behind the rising price of cooking gas in Nigeria reported that cooking gas marketers under the Nigerian Association of Liquified Petroleum Gas Marketers (NALPGAM) accused the Liquified Petroleum Gas terminal operators of causing the country's high cooking gas cost.

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Oladapo Olatubosun, the association's president, disclosed this when they met the Senate committee on gas in the company of the group members on Monday, October 23, 2023.


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