Reforms: Cooking gas association lauds Tinubu, demands total inclusion of plant owners in Offtakers’ participation

Gas cylinder
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As President Bola Ahmed Tinubu continues to undertake more people-oriented reforms in the various sectors, especially in the oil and gas, a stakeholder association has congratulated him on what they termed his “pragmatic and human-faced change approach in resetting Nigeria to an enviable nation worthy of being proud of amongst the comity of nations.”

The association, under the auspices of Cooking Gas Consumers Association of Nigeria (CGCAN), in a press statement yesterday, said that with the various reforms currently going in the country, “it seems there will be a light at the end of the tunnel.”

Gas cylinder
Gas cylinder

The statement which was signed by the association’s national president,  Dr Hakeem Olajide and made available to journalists, noted that though President Tinubu has so far done well in his approach to governance aimed at making the country a better place, “there are still some areas that need his urgent intervention in order to achieve the purpose of coming to power.”

These areas, the association president noted, “are basically in the gas sector where a lot of things are happening, that undermine the collective interest of Nigerians, and the pivotal agenda of the new administration.”

Specifically, the association stated that the “issue of cooking gas supply which affects an average Nigerian homes, has continued to be a lingering decimal sour that undermines the current price reduction gain in cooking gas being witnessed across the country, as the prices have insignificantly dropped.”

They, however, regretted that “it’s not yet uhuru for average homes in the country, which still see the essential commodity as a preserve of the rich, because the cartel in the sector has not open it up for more competent industry players to partake, which will help to crash the cost of the cooking gas and make it more  affordable to Nigerians.”

It would be recalled that due to the recent fuel subsidy removal announced by President Tinubu during his inaugural speech on May 29, and the recent  elimination of multiple foreign exchange (FX) rates, the price of a 12.5 kg cylinder which used to be sold before at  N10,000 or  N9,200, now sells for between N7,000 and N8,500 depending on the location,  while a 6kg gas cylinder presently goes for N3,792 on average while a kilogram sells for N632 as against N736 to N 740.

But the consumers body believes that the price, though a bit down, is still on the high heavens for poor and average citizens to afford, adding that the high cost as presently obtainable, is made possible by the cabals that are manipulating the market with the help of some officers in the regulatory agencies of the federal government.

The association is of the view that if President Tinubu will open up the space for more participation of industry players, which would be based on merit, the prices of cooking gas will eventually crash significantly as low as N4000 for 12kg.5 cylinder, while that of 6kg gas cylinder will go as low as N1,500.

According to the association, “presently only few selected individuals known as Offtakers, who are mostly favoured by the big men in the regulatory agencies, are given the licences to lift cooking gas, after which they sell the commodity to gas plant owners at exorbitant prices. 

“This is happening despite the repeated calls by our association to include more Offtakers in lifting cooking gas from NLNG, as some of these plant owners are more qualified and have operational gas plants, so as to widen the space for more genuine participants as industry players, which will help to bring the prices of cooking gas down and affordable for the citizens.” 

Offtakers are the plant owners who are licensed by Nigerian Liquefied Natural Gas (NLNG) to buy cooking gas from NLNG and distribute to industrial and domestic consumers.

But the association in the press release, regretted that despite efforts by President Tinubu to make things right in the country, “the NLNG which controls 51% shares of Exon Mobil stake in the sector, is still using a few Offtakers who receive between 40 to 100 trucks of LPG per month, while NNPCL which controls 49% chooses ordinary unqualified elements as their own Offtakers instead of involving qualified gas plants / companies, for equity and fairness.

They noted that this lopsidedness has contributed to the continuous and unstable price hike in the sector, as the few selected, unqualified Offtakers now determine the prices of cooking gas in the country, including the price to sell to the gas plant owners, who ordinarily are supposed to be part of the Offtakers, as against what is obtainable now.

The association noted that there is “enough gas in Nigeria, but the problem is corruption at the production and distribution points of NLNG and NNPCL.

“When things were good, ‘Bulk Purchase Agreement’ was given by NNPC to qualified gas companies on merit, and products were allocated equally to dealers, according to their various capacities monthly. There were no selected gold fishes and middle men and things went on well.

“The corruption started when NLNG created Offtakers and appointed some golden fishes who can play ball. NNPCL immediately joined the ball game and everything became worse.”

The association called on President Tinubu to immediately set up a machinery that will enforce the immediate return to status quo ante, as this will go a long way in relieving the burden of high cost of gas on  the consumers.

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