Group Managing Director of the Nigerian National Petroleum Corporation (NNPC) Limited, Malam Mele Kolo Kyari, on Monday explained that the high price of Liquefied Petroleum Gas (LPG) otherwise known as cooking gas was a reflection of the rising price of crude oil and its derivatives at the international market.
Kyari spoke with reporters shortly after inaugurating Emadeb Energy Services Limited’s 120MT LPG Storage and Bottling Plant in Abuja.
He, however, assured Nigerians that the NNPC Limited was working round the clock to boost the supply of LPG to ensure a crash of the price that has apparently soared almost out of reach of a vast majority of Nigerians using the product for cooking.
Nigerians now spend between N8,500 and N9,500 to refill their 12kg gas cylinders. The price hitherto was between N3,000 and N3,500.
The soaring price, according to Kyari, would soon crash once the NNPC raised its supply of the product even as he pointed out that the corporation was working hard to boost its supply.
Kyari said: “Two things are at play; one is the supply and the other is the international price of gas. It (price) moves with the price of every other petroleum product including crude oil and its derivatives. So it is a reflection of what is happening in the international market.
“What we are doing is to increase supply. Once supply is increased the prices will come down.”
The NNPC GMD said that the newly-inaugurated LPG plant was going to “reduce the cost of energy for Nigerians for the fact that LPG is cheaper than any other product you can think of, especially as cooking fuel.”
He commended Emadeb Energy Services Limited for building the LPG plant in Abuja, explaining that the project aligned with and fitted into one of the steps the Federal Government had taken to provide gas for its citizenry.
He was upbeat about the company’s plan to, within the next 12 to 18 months, build a similar plant in six different locations countrywide, pointing out that the company had gone into these ambitious ventures in line with President Muhammadu Buhari’s decade of gas initiative.
Kyari said: “We are aware that a lot of institutions and companies are doing this across the country. We are selecting this in line with Mr President’s objectives to make this the decade of gas.”
He also stated that one of the many ways investors could key into the decade of gas initiative was to have facilities like Emadeb’s for auto-gas conversion, and also to ensure that LPG is easily accessible by the people.
“We think this is a very nice step. This company has promised to make six of these facilities available within the shortest period of time. Ultimately, we know this will serve the people within this area. We are expecting more Nigerian companies to come into this,” he added.
Chief Executive Officer of Emadeb Energy Services Ltd., Mr. Debo Olujimi, said that although the capacity of the plant was currently 120MT, plans were afoot to expand it to 240MT in the next 18 months.
He described the business of gas infrastructure as capital intensive, and urged the Federal Government to encourage private investors to get value for their money.
Olujimi said: “There is a lot of value in gas. Everybody knows that gas is the way forward and the way it is, there is much gas with the decade of gas and with over two trillion cubic feet of gas reserve.
“We are about to start developing our asset with about 200 billion cubic feet of gas at the Ibom field. We intend to convert some of the gas processed out of that facility to support the local market.
“It is capital intensive doing gas infrastructure and government needs to encourage private investors so that private people can come in with funds and equipment to get the value.
“In the electricity sector today, the major issues are the shortage of gas and the pricing of gas; those are things that the government has to help us to look at.”
He disclosed that shortage of foreign exchange was also a major challenge in the business.
He, however, pointed out that the company had the support of the NNPC and it could produce its gas locally.