Gas price, the return of firewood to kitchens

Ibe Kachikwu, a former group managing director (GMD) of Nigerian National Petroleum Corporation (NNPC), and Nigeria’s immediate past minister of state for petroleum resources is a man of many words. During his days in the oil industry’s key posts, he spoke more and acted less.

As GMD of NNPC in 2015, Kachikwu lamented that NNPC was spending incredulous sums on kerosene subsidy. He promised a “Cooking gas revolution” that would drive kerosene out of Nigeria’s kitchens.

Under the cooking gas revolution, Kachikwu promised to flood Nigeria with free cooking gas cylinders and cookers in a desperate bid to compel those at the upper end of the low income bracket to abandon kerosene and use gas.

He said that by the end of 2016, the cooking gas revolution would be taken to Nigeria’s sprawling rural communities where most of the 122 million compatriots eking out a living below poverty line, cook with firewood.

Ironically, by the time Kachikwu was eased out of the petroleum resources ministry in 2019, not one gas cylinder had been delivered to any Nigerian as the ousted minister promised. The cooking gas revolution turned out to be one of Kachikwu’s superfluity of failed promises.
Nigerians are very familiar with their treacherous rulers. They know that their rulers talk more and act less. That has not changed with time.

A year after Kachikwu left office, NNPC complained that ageing gas cylinders were serious danger to cooking gas consumers as they could explode, kill scores of people and raze down houses.

The corporation promised to change the country’s cooking gas cylinder ownership policy. Less than 20 years ago, empty cylinders were filled by gas dealers and distributors while consumers seeking to buy gas, trade in their empty cylinders and go home with another one filled with gas by distributors.

The policy was suddenly replaced with one that made consumers the permanent owners of the cylinders. The danger in the current policy is that consumers hardly change their cylinders. Even as the average life span of a standard cooking gas cylinder is pegged at 15 years, there are gas cylinders in the kitchens of some Nigerians that are 30 years old.

When it starts rusting, the owner gives it a new coat of paint that takes care of its aesthetics and conceals the ticking time bomb behind the treacherous paint coat. Most of the cooking gas cylinders in the homes of Nigerians are just waiting to explode as they have spent about twice their expected life span.

It was argued that standardization and safe use of cooking gas could only be ensured when ownership of gas cylinders rests strictly with dealers and distributors.
Consequently, NNPC promised to retrieve cylinders periodically and subject them to stress test and re-certification to ensure safety.
Two years into the announcement of the grandiose plan, not one re-certification plant is known to have been set up to facilitate the stress tests which would ensure that the cylinders are not sitting time bombs.

That, again has joined the long list of failed promises on the federal government’s numerous plans to enhance Nigeria’s appalling gas consumption rate.

Those who waited for Kachikwu’s free gas cylinders and cooking equipment are sufficiently frustrated to enact their own plans to drive kerosene out of their kitchens.
With kerosene now selling at N300 per liter, many have grudgingly switched to gas.
At the price of N3,700 for 12.5kg at the beginning of 2021, cooking gas was comparatively cheaper that kerosene. Many saved to buy expensive gas cylinders which unlike Kachikwu’s failed promise, cost them anything from N14,000 for the 12.5kg version.
The cheapest gas cooker is anything from N5, 000. Embattled consumers were too stressed to look at the cost. They just wanted the result, which amounted to cheaper and cleaner domestic cooking fuel.

Now the federal government has proved that they were wrong to switch to gas. They would have to re-toll their kitchen again to be able to cook. This time many would not return to kerosene because with the upbeat in crude oil price, the pump price of the dirty cooking fuel would be sailing perilously close to N350 per liter.

The federal government has priced cooking gas out of the reach of many consumers. With poverty on the rampage and food inflation surging out of control, the only option left is for thousands in urban Nigeria to join millions of their compatriots in rural communities to cook with firewood.
Those in rural communities fell trees and turn them to cooking fuel. The result is uninhibited de-forestation.

Unfortunately, with kerosene and gas effectively priced out of the reach of many, the only option is to return to the bush and strip it of the protective trees that toiled to stop the menacing advance of the Sahara Desert to the Atlantic Ocean.

The price of gas is so high that the 12.5kg cylinder now sells at some retail outlets for N7,000. Merciless tax and a weak naira are responsible for the galloping price of cooking gas. Nigeria sits on the largest gas reserve in Africa. It flares gas worth N300 billion annually in its oil fields. Unfortunately, Nigeria imports 60 per cent of the cooking gas it consumes.
The gas imported with expensive dollars arrive the shores of Nigeria with incredulous landing cost. The federal government worsened the high landing cost by imposing 7.5 per cent value added tax (VAT) on imported cooking gas.
No one in the federal government knows how to bring down the price of cooking gas. Nigeria Liquefied Natural Gas (NLNG), the company processing gas mainly for the export market has very limited facility for processing cooking gas.
Even with the limited facility, NLNG has raised its allocation of cooking gas to the domestic market from 350,000 to 450,000 metric tons. That ironically is just 40 per cent of the local consumption. The remaining 60 per cent is imported at the ridiculous exchange rate of N530 to the dollar.

With NNPC swindling the federal government on petrol subsidy through dubious consumption figures, no one wants to add cooking gas subsidy to the list.

Ironically, the expected increase in crude oil consumption could push oil price pretty close to $80 per barrel. If that happens, Nigerians might refill the 12.5kg cylinder of cooking gas at N10,000.
Nigeria’s per capita LPG consumption stands shamefully at 2.6kg per annum, while Senegal chalks up an intimidating 9kg. With high gas price driving many into re-tooling for firewood, Nigeria’s consumption might drop to 2kg.

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