By MIlcah Tanimu
Recent events, including a fire incident at Shell’s Gbaran facility in Bayelsa, have ignited fears among Nigerians regarding the possible escalation of liquefied natural gas (LNG) prices in the country. This comes at a time when the cost of living is already soaring, with cooking gas prices reaching N1,300 per kilogram.
The fire outbreak at Shell’s Gbaran facility, a crucial component of Nigeria’s LNG gas feedstock project, has raised concerns about its potential impact on gas prices. While Shell has assured that the incident will not lead to an immediate operational shutdown, investigations are underway to assess any potential consequences.
This development follows the Nigerian government’s decision to raise the commercial wholesale gas price by 11%, from $2.50 to $2.92 per Metric Million British Thermal Unit (MMBtu), as announced by Engr Farouk Ahmed, the Chief Executive of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) in April.
The increase in gas prices has broader implications, affecting sectors reliant on LNG for electricity generation and other purposes. Additionally, the price of liquefied petroleum gas (LPG), commonly used for cooking, has surged by 46.88% yearly. Despite the federal government’s value-added tax waivers for LPG imports, prices remain high.
Nigeria, which depends on LPG imports to meet half of its consumption, faces challenges in balancing domestic demand with export priorities. Oil and gas expert Barr Ameh Madaki emphasizes the need for strategic measures, including banning LNG and LPG exports, to stabilize LPG prices and address domestic needs.
Madaki suggests redirecting LPG to Nigerian households, highlighting its potential benefits over gas flaring. Addressing these issues requires a comprehensive approach, including policy interventions to prioritize domestic consumption and reduce reliance on imported LPG.
As Nigeria grapples with fluctuating gas prices and rising living costs, there is a pressing need for coordinated efforts to safeguard the interests of consumers and ensure sustainable energy access for all.
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