3 Reasons Why Cooking Gas Is Expensive

source: vanguardngr
49

Except you reside inside a forest and you cook with firewood, you will certainly know that the price of LPG aka Cooking Gas skyrocketed this year, on 24th November 2020 a truck of LPG sold for #4.5M, today's price is #11.2M for a truck. The pricing of LPG is not regulated and is primarily based on market forces. These are the three factors affecting the current price. 1. EXCHANGE RATE You shouldn't be surprised that a lot of our LPG is imported which makes the market heavily dependent on dollars. Therefore, with increase in exchange rate you will have a corresponding increase in end user price. 2. HIGH GLOBAL GAS PRICE LPG is a product of Crude oil and Gas, therefore post Covid lock-down as seen a sharp increase in demand for gas all over the world to power the global economy which invariably leads to price increase. This effect also trickled down to us in Nigeria as importers of LPG. 3. Government Policy A Presidential directive on July 11,2005 by the then led Obasanjo government had removed VAT on imported LPG while this present government reversed the directive and excluded VAT from locally produced LPG while at same time told importers to pay retroactive VAT from 2019 when this directive was made. for more info read up (). This new policy made a lot of importers suspend their operation which affected the quantity of LPG available in the market . As we learned in basic economics, the law of scarcity states "that If what we desire “appears” to be in limited supply, the perception of its value increases significantly". Nigeria government had proclaimed that this is the "Decade of Gas" with emphasis on LPG for cleaner cooking, AutoGas, Power generation etc. but reality seem to negate that proclamation.

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