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Opinions of Wednesday, 15 September 2021

Columnist: Oladele Oladipupo

High cost of cooking gas: matters arising

File photo to illustrate the story File photo to illustrate the story

The word “Energy” according to the Learner’s Dictionary is defined as the power from oil, coal, etc that produces heat, movement. There are two major sources of energy.

These are renewable energy and non-renewable energy. Examples of renewable energy include: solar, nuclear, wind, geothermal and biogas while examples of non-renewable energy include: Petroleum products, coal and fuel wood. In 1987, the policy guidelines in energy for Nigeria were developed. The main energy policy guidelines have, as thrust, the environmental conscious exploitation and utilisation of the nation’s energy resources in the overall interest of the masses. In order to achieve the goal, the objectives are namely;

-Developing and maintaining a regular inventory of our energy resources, current and projected needs including human and material resources;

-Guaranteeing the continuity and adequacy of energy supply in the short, medium and long terms including appropriate conservation policies;

-Supplying energy at economically favourable cost in the long term;

-Giving due and timely consideration to security and the needs for environmental protection of the public and the working population from hazards arising from the exploitation, conversion and utilisation of energy;

-Improving and intensifying our technological performance capability in the energy sector consistent with self-reliable and need to attain economic competitiveness; and

-Providing a co-ordinated framework for the implementation of these policy issues.

In Nigeria, crude accounts for 90 per cent of the export earnings and 80 per cent of government revenue. Over the years, fluctuating world prices have consequently undermined the national economy. Moreover, it is also important to mention that due to the breakdown of our refineries, our economy has been badly affected. Because of the current state of our refineries, the Federal Government in its wisdom decided to refine the crude oil outside the shores of Nigeria and this has adversely affected the cost of refined petroleum products.

In the same token, the exchange rate of naira to American dollar has also adversely affected the cost of importation of cooking gas. According to a report in The PUNCH, Monday, August 30, 2021, in December 2020, the cost of 12.5kg of cooking gas was sold for N3,500 while in July 2021 the cost had risen up to N6,500 which is over 100 per cent increase. Reasons have been adduced for the current cost of the commodity.

The national chairman of Liquefied Petroleum Gas Retailers Association of Nigeria highlighted three major reasons for the high cost of cooking gas. The first major factor according to him is due to the fact that about 70 per cent of the cooking gas is imported, of which importers have to contend with the high cost of foreign exchange. Secondly, there has been a rise in price of petroleum products in the international market and because of this, the cost of LPG has equally gone up. Therefore, importers have to pay more on imports. Thirdly, the Federal Government’s added VAT on imported LPG which is 7.5 per cent of the cost of the commodity. This has led to high price of cooking gas.

I want to take a look at this issue from the environmental perspective. To begin with, one of the implications of this policy is that there will be upsurge in the use of coal and firewood because most people mainly low income earners would not be able to afford the current price. The burning of charcoal and firewood will no doubt have adverse effects on the human health and environment. For instance, when coal or firewood is burnt, there will be emissions of greenhouse gases into the environment and the implication is that the atmospheric temperature will increase, it would also lead to flooding, ocean surge and rise in sea level to mention but a few. Nigeria being a signatory to some of the international conventions and protocols such as UN Convention on Climate Change, UN Convention for the Protection of Ozone Layer and Montreal Protocols on Substances that deplete the ozone layer; the country is supposed to abide by all the treaties that have been signed and ratified. Another environmental impact of this policy is that most rural dwellers will definitely resort to indiscriminate felling of trees which could lead to deforestation in the South and desertification in the northern part if efforts are not made to replace trees. Other environmental impact of this policy includes incessant flooding in most of the states of the federation which could lead to massive destruction of lives and property. The question now is: what is the way forward? I would like to suggest the following measures as a panacea to this problem:

-The Nigeria Liquefied National Gas should endeavour to increase its domestic supply so as to make the commodity available and affordable;

-The Federal Government should as a matter of urgency rescind its decision on the 7.5 per cent import tax on imported liquefied natural gas so as to alleviate the sufferings of common man. I would suggest that the 7.5 per cent import tax should be applied to luxury goods such as cosmetics, perfumes, assorted imported drinks etc.

-The Federal Government should try as much as possible to strengthen our local currency by encouraging exportation of both local foodstuff and cash crops. To the best of my knowledge, whenever local currency is devalued, there is always hyper-inflation, loss of jobs, high rate of unemployment, misery and poverty. What we need to do as a nation is to to vigorously pursue our industrialisation policy to the letter.