NCDMB, CGCAN & NLNG HAVE DEVELOPED A KEEN INTEREST IN THE COOKING GAS MARKET.

By Oluwabukola Jimoh ــ Last Update 27 April 2023

The Nigerian Content and Development Monitoring Board (NCDMB) and the Nigerian Liquefied Natural Gas Limited (NLNG) are currently in discussions for the production of 1.2 million gas cylinders annually, according to the Executive Secretary of the Board, Simbi Wabote. The project is part of the Federal Government’s effort to achieve 70% local content in the oil and gas sector by 2027. The proposed 1.2 million gas cylinder production will curb importation and support local production. The Board's goal is to use the Nigerian Oil and Gas Opportunity Fair (NOGOF) conference to promote, drive and showcase more business opportunities in the Nigerian oil and gas sector.

However, the Cooking Gas Consumers Association of Nigeria (CGCAN) has responded to the high cost of the ex-depot price of Liquefied Petroleum Gas (LPG) known as cooking gas. CGCAN has attributed the high cost to middlemen in the gas industry, who play a significant role in the sector. According to CGCAN, the hike in the price of cooking gas is as a result of middlemen who manipulate the prices of cooking gas in the domestic gas market. CGCAN calls on the regulatory agencies to address the issue of middlemen and ensure transparency in the sector. The association also states that opening up a cooking gas market will crash LPG prices, thereby making it affordable for end users as well.

LPG in Nigeria finds that the ongoing discussions between the Nigerian Content and Development Monitoring Board (NCDMB) and the Nigerian Liquefied Natural Gas Limited to produce 1.2 million gas cylinders every year is aimed at increasing local content in the oil and gas sector by 2027. This initiative is expected to help reduce the importation of gas cylinders and improve local production in Nigeria. However, it is unclear how much funding has been set aside for this project or when it will begin.

In addition, the high cost of the ex-depot price of Liquefied Petroleum Gas (LPG) popularly known as cooking gas has been a lingering issue in Nigeria. The Cooking Gas Consumers Association of Nigeria (CGCAN) has blamed middlemen in the industry for the exorbitant and skyrocketing price of cooking gas in the country. According to the association, these middlemen who do not have requisite conditions or licensed plants but are known to regulators, manipulate and hijack the prices of cooking gas in the domestic gas market. Whether opening up a gas market will actually crash prices or give a specific set of stakeholders monopoly of market is yet to be decided but we will follow up on the issue as it unfolds.

These issues highlight the need for the Nigerian government to focus on improving the local production of LPG and reducing the influence of middlemen in the industry. This could be achieved by promoting more business opportunities and partnerships in the oil and gas sector through conferences such as the Nigerian Oil and Gas Opportunity Fair. Additionally, the government could provide support for licensed plant owners to help them meet the necessary requirements for them to be part of Offtakers. This would help reduce the cost of cooking gas in the country and improve the affordability of LPG for the average Nigerian.

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Oluwabukola Jimoh

Oluwabukola Jimoh is a dynamic academic writer and captivating energy blogger. She is able to delve into intricate subjects with an insatiable thirst for knowledge, crafting thought-provoking essays that engage and enlighten her readers.