The Federal government given reasons to the recent price hikes in cooking gas, attributing it to the removal of subsidy on the product.
It said the prices of the product are now determined by forces in the international market.
Minister of state for petroleum resources, Timipre Sylva, revealed this to journalists after a meeting with President Muhammadu Buhari at the presidential villa, Abuja
He was at the Villa alongside Authority Chief Executive, Nigeria Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), Farouk Ahmed and Commission Chief Executive, Nigeria Upstream Petroleum Regulatory Commission (NUPRC), Gbenga Komolafe.
He said, “But you know, 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. And you all are aware that in Europe, today, gas prices have gone up, there was even crisis in 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.
“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 incentivise 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 authority are handling and I want to assure you that we are quite concerned. Mr. President also is very concerned is aware that the price of gas is high in the market, and we’re doing everything trying to see how we can bring down the price of gas especially as we approached the yuletide.
Asked how much hope Nigerians have on the reduction of the price, he said “I mean, Yuletide is already upon us and we are already a few weeks to it? Well, as I said, this is a commodity, which price is not determined by us.
” If you tell us, for example, that crude oil prices are high, there’s nothing we can do about it because crude oil prices are not determined in Nigeria. We also, like you check for what the price of crude oil is for today because it is not determined here.
“In the same vein, when we see gas prices going up, gas prices are not also determined in Nigeria, just like you, we are also checking what the price of gas is in the international market.”