Nigerians groan as energy crisis worsens

•Fuel shortage worsens in Lagos, Abuja, Oyo

•Diesel price hits N820 per litre, hinders fuel distribution

•Households, firms, others suffer as power supply drops

•Cooking gas price rises 38.46% in H’1, 22

•Airlines panic as price of aviation fuel surges to N760 per litre

THERE were clear indications, yesterday, that the worsening energy crisis has scuttled operations in different sectors of Nigeria’s economy, thus causing some investors to move to other nations.

Specifically, investigation by Vanguard showed that it has affected the ease of doing business in Nigeria, compared to other African countries, including Ghana and Angola, where investors, including Dunlop, have gone to invest their resources.

It also indicated that the energy crisis, manifesting in forms of the prolonged fuel shortage, rise in the prices of diesel, aviation fuel and cooking gas as well as epileptic power supply, has negatively impacted on individuals and households.

For instance, transporters, yesterday, increased their fares by more than 33 per cent as fuel price continued unabated in Lagos, Abuja and Oyo state.

Commuters count losses

Consequently, Lagos residents in Ajah, Lekki-Epe have continued to count their losses as fuel scarcity bits harder within the state.

Angry and frustrated commuters that spoke to Vanguard, yesterday, said despite the exorbitant prices charged by drivers, they were not able to get to their destinations for hours.

For instance, drivers, who had charged N700 from CMS to Ajah instead of N400 on Monday, this week, further increased the fare to N1000 on Tuesday.

Speaking to frustrated businesswoman who only identified herself as Mrs. Uduak Etim said: “I left my house at Onosa before 8: 00 AM and till 1: PM and didn’t get to Ajah despite that I paid N700. 

“I tried to break my journey when I was told to pay N1500 from my area to CMS; I then decided to come to Ajah with hope of boarding BRT or any other bus. But on getting here, I was told to pay N1000. The suffering has been so much and there is no money anywhere.

Households, firms, others mourn over poor power supply

However, Nigerians have been facing epileptic power supply as electricity generation continues dropping always.

This was grossly inadequate for transmission and distribution to electricity consumers, including households and organisations in all parts of the nation.

It was gathered that many consumers did not have a supply, while others struggle to generate their power independent at higher costs.

Cooking gas price rises 38.46% in H’1, 22

Also, the price of Liquefied Natural Gas, LPG, popularly known as cooking gas has risen by 38.46 percent in the first half 2022 for 12kg at (N10, 800) against N7, 800 (12kg) recorded in the corresponding period of 2021.

A market survey showed that the 12 kilogramme, kg, which price stood at N7, 800 during the first half of last year has increased to N10, 800 in Lagos, Abuja, and other cities, thus forcing many households to shift to kerosene and charcoal as the closest alternatives.

Corroborating this position, the average price for refilling a 5kg Cylinder of Cooking Gas stood at N3921.35 in May 2022 from N3800.47 recorded in April 2022 showing an increase of 3.18 percent month-on-month.

However, on a year-on-year basis, the average retail price for Cooking Gas increased by 89.28 percent from N2071.69 in May 2021.

According to analysis, the highest average price for refilling a 5kg Cylinder of Liquefied Petroleum Gas (Cooking Gas) was recorded in Gombe with N4366.67, followed by Bayelsa with N4325.00 and Adamawa with N4250.00.

On the other hand, Yobe recorded the lowest average price with N3200.00; this was followed by Ogun and Ondo with N3450.00 and N3480.77 respectively.

In addition, prices analyzed by zones show that the average retail price for refilling a 5kg Cylinder of Liquefied Petroleum Gas (Cooking Gas) was highest in the South -East with N 4094.39 followed by the North-Central with N3989.98 and South-South with N3977.72, while the South West recorded the lowest average retail price of N3719.53.

The average price for refilling a 12.5kg Cylinder of Liquefied Petroleum Gas (Cooking Gas) increased to N8726.30 in May 2022 from N8164.37 in April 2022 representing a 6.88 percent month-on-month increase. Similarly, on a year-on-year basis, the average retail price for refilling a 12.5kg cooking gas increased by 103.46 percent from N4288.95 in May 2021.

Gas experts react

The National Chairman, Liquefied Petroleum Gas Retailers, LPGAR, branch of National Union of Petroleum and Natural Gas Workers, NUPENG, Mr. Michael Umudu, said that the situation was, indeed, worrisome for both retailers and consumers.

He stated that the FOREX allocation from the Nigerian LNG Ltd. to marketers could only meet about 40 per cent of the consumption in the country, adding that prices at the depots have similarly risen to about N12.6 million for 20 metric tonnes, from N11.4 million, which was the average price a few weeks ago.

Umudu said: “The worrisome aspect of this development is that it has continued to rise on daily basis for weeks now but began to escalate in the last few weeks leading to significant increases in both depots and retail outlets. For us as retailers, it is a big problem because we can’t even afford to stock up our shops and even when we do, it will take time before we can make enough sales to get back our investments. What we find now is that people even bring in 12.5kg cylinders but opt to fill them with less than 6kg of gas just to manage at home.”

He said the union expected the government to come up with clear policy direction for the development of LPG in the country to forestall the ugly situation, stressing; “LPG as a clean energy has steadily been embraced by low income earning Nigerians in the last seven years against previous years when it was seen as the preserve of the rich.

Also, the General Manager, External Relations and Sustainable Development, NLNG, Mr. Andy Odeh, noted that the company supplied about 400,000MT of LPG to the domestic market in 2021. He said the board approved the supply of 450,000MT, 100 per cent of the company’s LPG production (Propane and Butane), to the domestic market in 2022, adding that this marked the company’s strong commitment to the continued growth of the domestic LPG market. 

Diesel price hits N820 per litre

A market survey by Vanguard showed that the high price of diesel, currently hovering at N820 per litre has affected the distribution of petrol nationwide.

In an interview with Vanguard, yesterday, National Operations Controller, IPMAN, Mr. Mike Osatuyi, said: “The high price of diesel, which currently cost N820 per litre, has compelled us to spend as much as N500, 000 and N800, 000 to take a tanker of product from Lagos and Ibadan respectively.

Also, the increase of aviation fuel price to N714, from N670 per litre, has also culminated to high cost of operations for airlines, thus forcing them to shift it in form of high fares to consumers.

Why FG can’t intervene – Sylva

In any case, the Federal Government is not in a position to intervene in the rising price of diesel and aviation fuel because prices for both products are deregulated, the Minister of State Petroleum Resources, Chief Timipre Sylva has said.

Chief Sylva who stated this in Abuja yesterday explained that the prices of both products which are imported are being impacted by foreign exchange rate.

He said: “So, it is not within the purview of the government to fix the prices at all. And of course, the actual issue is also the foreign exchange. People cannot access foreign exchange to import this." 

How Nigeria slips into crisis — DAPPMAN

It was gathered that Energy crisis has been with us for decades because of the nation's inability to develop and maintain infrastructure to produce and deliver adequate energy to consumers.

However, Member Companies of Depot and Petroleum Products Marketers’ Association of Nigeria (DAPPMAN), who attributed it partly to the Ukraine-Russian war have empathized with customers and teeming Nigerian public.

In a statement made by Executive Secretary, DAPPMAN, Olufemi Adewole, "Nigerians would please note that the on-going Russia-Ukraine War has adversely affected the world, including our dear country Nigeria. Its adverse impact on the international prices of fuel and food supply, have resulted in a corresponding increase in local prices of goods and services.

"The above situation has had its adverse effects on the operating cost of managing the various petroleum products depots in Nigeria. You would note that the petrol we supply, is sourced, solely from NNPC Limited’s marketing subsidiary, Petroleum Products Marketing Company Limited (PPMC) for our onward sale to the public at the regulated price of N165 per litre. This purchase from the PPMC is achieved through funds sourced with high bank interest charges, alongside increased costs of hiring vessels utilized in the delivery of fuel cargoes to our depots. 

"Overtime, depot Owners and the Government have struggled to sustain supply of petrol at the current pump price of N165 per litre despite the huge subsidy cost to Government and abysmal or no profit margins to the Depot Owners.

"But for its suspension, the implementation of the Petroleum Industry Act 2021 would have provided an ideal enabling environment by creating the free market in which demand and supply would affect fuel pump price." 

Culled from Vanguard