Nationwide demand for Gas drops, prices soar

Demand for Liquefied Natural Gas (LPG) has dropped to a record low across the country.

The President, Nigerian Gas Association, Ed Ubong,  said during a downstream event in Lagos that national annual consumption was currently between 1.3mn and 1.5mn metric tons compared to the Federal Government’s annual target of 5mn metric tons.

Executive Secretary, Nigerian Association of Liquefied Petroleum Gas Marketers, NALPGAM,  Bassey Essien, confirmed also said that the drop in consumption rate was due to increasing prices.

According to him, price of 20 metric tons of cooking gas as of Tuesday shot up from N12mn to N12.8mn.

“Prices have been volatile for a while, and it’s because the purchasing power has dropped. Gas is no longer affordable, and buyers are either regulating use or found alternatives. As at today, a 20-metric-ton of gas sells for about N12.8mn. Price has hovered around 10mn-12mn before now. Just imagine what we bought last for N12mn rising by N800, 000 for one truck,” he said.

Very Low

While speaking during one of the technical sessions on the topic, ‘Gas as a catalyst for sustainable economic development- The role of Nigerian Content’, at ‘The Nigerian Content Midstream and Downstream Oil and Gas Summit 2022’ organised by the Nigerian Content and Development Monitoring Board, NCDMB in Lagos on Tuesday, gas stakeholders unanimously agreed that national gas consumption was currently very low.

They expressed worry over the dwindling purchasing power of Nigerians. They, however, did not state what current actual consumption or demand was when compared to figures already quoted by Ubong.

The MD/CEO, TECNO Gas Ltd, Nkechi Obi, during the panel session, said gas pricing was one of the reasons for low demand across the country.

“Currently, gas demand is getting very, very low across the country, and this is due to high gas pricing”, she said, adding that lack of government policy to drive demand also formed part of the reason demand was abysmally low.

She urged the Federal Government to intervene in terms of formulation of policy and funding to drive up demand, adding that gas was a developmental commodity.

According to reports, between 55-60 percent of gas utilised in Nigeria is currently being imported by independent marketers, while the Nigerian Liquefied Natural Gas Limited (NLNG) supplies 40 percent.

Nigeria has been described as a gas-rich country with approximately 207 trillion cubic feet (Tcf) of proven gas reserves, ranking 9th in the world and accounting for about 3 percent of the world’s total natural gas reserves of 6,923 Tcf.

Nigeria has proven reserves equivalent to 306.3 times its annual consumption.

Natural gas is estimated as the fastest growing fossil fuel in the world, and is projected to overtake coal by 2030, as the second largest source of energy.

The Federal Government said in April, that the value of Nigeria’s proven gas reserves of about 206.53 trillion cubic feet was over $803.4tn.

Ubong said Nigeria needed to deepen domestic production of gas to bring down prices and increase local consumption, adding that affordability was being threatened.

Punch/Hauwa Abu