The frequent increase in the price of Liquefied Petroleum Gas (LPG) also known as cooking gas has been blamed on incessant attacks on LPG vessels and the delay in LPG vessel movement orchestrated by pirates.
The General Manager, Gas Renewable Energy at the Petroleum Products Pricing Regulatory Agency (PPPRA), Olasupo Agbaje said this at an interactive retreat on understanding the dynamics of downstream sector of the petroleum industry in Abuja.
Olasupo Agbaje, General Manager, Gas and Renewable Energy, Petroleum Products Pricing Regulatory Agency, said the agency would release a Liquefied Petroleum Gas (LPG), also known as cooking gas, pricing template latest middle of 2020.
He added that the removal of Value Added Tax (VAT) had initially brought down the price of LPG before the recent spike in the price.
Agbaje noted that the LPG market was very sensitive and reacted sharply to any disruption in supply.
“The removal of VAT on locally-produced LPG had an immediate impact on the price of the commodity in the market.
“There are many factors that account for pricing. When VAT was removed within one month we had about 20 per cent drop in the price of LPG.
“If you now check, we had some other incidents. There were pirates’ attacks on some LPG vessels. There are combinations of factors.
“It is a deregulated market; so nobody is tying down any price.
“You find that it had an immediate impact and then other factors now came in which affected the price and it now went up again.
“The LPG market is very sensitive. Once there is any disruption in vessel movement, or it is stuck in Lagos, you find that people immediately look and take position and them begin to adjust their prices.
“We have had a series of pirates’ attacks on LPG vessels. It is an issue that needs to be addressed,” he said.
He said that the agency was working with stakeholders and operators in the sector to ensure a fitting template that would favour everyone.
According to him, the template will ensure fairness and drive competition in the industry.
“We are looking at middle of next year, we will come up with a good LPG pricing template that will serve all; you know that it is a fully deregulated sector.
“We will come out with a template that everybody will access and will be able to question any operator that sells above what the template says,” he said
Agbaje further explained that the PPPRA had a strong partnership with the Nigerian Maritime Administration and Safety Agency (NIMASA), adding that the agencies would continue to work towards addressing the challenges on the waterways.
According to him, the focus will be more on challenges affecting petroleum products supply.
“We have a strong relationship with NIMASA, but piracy goes beyond relationship; it is a criminal thing.
“You have them operating on their own will. Once there is any disruption, NIMASA would do what it had to do.
“We will continue to collaborate with NIMASA; but this at times has such impacts on the market that is beyond their control.
“But we will continue to do our best to ensure that we minimise some of these disruptions,” he said.
He further stated that the Federal Government was working on a cylinder injection programme, and was in consultation with stakeholders on the strategy and modality for the programme.
Also, General Manager, Operations, Mr Soji Soloye, disclosed that the government was currently working on a framework to determine the actual volume of fuel consumed in the country.
He said that Nigeria currently relied on Premium Motor Spirit (PMS), solely imported into the country by the Nigerian National Petroleum Corporation, (NNPC), as none of the country’s refineries was presently working.
He explained that the redundancy of the refineries was the major reason the actual price of PMS sourced from local refineries could not be determined.
According to him, when the refineries come on stream again the PPPRA will publish the template for the price of locally produced PMS.
