Hike: We Don’t Have Control Over Cooking Gas Price —FG

Posted by African Examiner Business News, Featured, Latest Headlines Wednesday, November 24th, 2021

The Federal Government stated that it has no control over the rising price of cooking gas.

This is even as President Muhammadu Buhari expressed concern over the development, especially as gas prices are determined by global market.

He also directed the Minister of State for Petroleum Resources, Timipre Sylva, to proceed to Nembe, Bayelsa State, to investigate the level of damage done by the recent oil spillage in the area.

The Minister of State for Petroleum Resources, Timipre Sylva, who disclosed this to State House correspondents at the Presidential Villa, Abuja, said he was at the State House to introduce to the President the CEO, Nigerian Midstream and Downstream Petroleum Regulatory Authority, NMDPRA,

Engr. Faruk Ahmed, and the CEO, Nigerian Upstream Petroleum Regulatory Commission NUPRC, Engr. Gbenga Komolafe.

Fielding question on what was responsible for the spike in the price of cooking gas and what government was doing to address the situation, Sylva said the government had no control over the price increase and could not subsidize the product because it was fully deregulated.

While stressing that gas prices were determined at the international market, the Minister said government was doing everything possible to bring down the price especially during the yuletide.

He said: “We must understand that cooking gas is not subsidized. It is already a deregulated commodity, so the price of cooking gas is not determined by government or by everybody in the industry. In fact, gas prices are determined internationally.

“You all are aware that in Europe today, gas prices have gone up, there was even crisis in Europe relating to gas prices. So the pricing of gas internationally now affects also the price of gas in the country.

“Apart from that, there are some issues around VAT charges on imported gas, and, of course, taxes on imported gas, which we are handling. But of course, quite frankly, these taxes on imported gas, you must also juxtapose it side by side with the local producers of gas.

“So if you incentivize the importance too much, then you will also kill the local industry. And also, you don’t want to incentivize the local industry at the expense of the imports, because if you incentivize the local industry at the expense of the imports, then you will not have enough gas produced within the country.

“So, these are the issues of balancing that the midstream and downstream regulatory authorities are handling and I want to assure you that we are quite concerned. Mr. President also is very concerned. He is aware that the price of gas is high in the market, and we’re doing everything to see how we can bring down the price of gas, especially as we approached the yuletide. “On what the Federal Government was doing to minimize damage in Nembe, Bayelsa State, where there is oil spillage, he said President Buhari had directed that he should visit the community today to assess the situation.

He said: “The spillage in OML 29, we are quite aware of. Unfortunately, it has happened. It is also one of the issues I discussed with the President as minister and he has actually asked us to visit the site to assess the situation and report back.

“Definitely, we are quite concerned with what is happening in Nembe and will be going there very soon tomorrow (today) to go and look at what is happening and report back.

“Mr. President is personally interested and we have discussed it and he said we should go there and come back and report to him because environmental degradation issues are things that we are not going to condone but, of course, we’ll work with the operators of OML 29 to ensure this spillage is brought under control as quickly as possible.”

On what was responsible for the resurfacing of queues in filling stations, the Minister directed the CEO of the Midstream and Downstream Petroleum Regulatory Authority, Ahmed to answer it.

he NMDPRA CEO said: “You see intermittent queues in some parts of Abuja and environs. Basically, what happened is that some of the depot owners are selling PMS above the official ex-depot price of N148, they are selling at N156, N157.

“The reason they adduced is that they are paying for their logistics like shipping in US dollars, they’re paying for NPH, port charges and NIMASA charges in US dollars.

“They have to go to black market to source these US dollars. And that differential between the official and the black market they buy is why they added about N9 to N10 to N15 and it depends on whether you are in Lagos, Calabar, Port Harcourt, or Oghara.

“Now we had a meeting the week before last on Tuesday, the ninth, and the NPA was there represented and the DG NIMASA was there as well NNPC, major marketers were all there and we all agreed and resolved that NNPC’s excess capacity of their shipping vessels will be chartered to all marketing companies to charge in Naira so that NNPC now will go and source for US dollars through the CBN.

“As for the NIMASA and NPA charges, it was all agreed that they will revert to their supervising ministry to get direction on the receipt of these charges in Naira, rather than US dollars and I understand the process of that engagement with their supervising ministry has already commenced.”

Vanguard