Oil & Energy
Economist: Increase In Kerosene, Cooking Gas Prices Will Affect Nigerians
The continuous increase in kerosene and cooking gas prices will lead to increased difficulty in meeting basic food and other essential commodities needed by Nigerians.
An economist, Prof. Aminu Usman, stated this an interview with newsmen in Abuja.
Usman, an Economics lecturer at the Kaduna State University, was reacting to the recent report on price of household kerosene and Liquified Petroleum Gas (cooking gas) released by the National Bureau of Statistics (NBS).
According to the NBS report, on a year-on-year basis, the average retail price per litre of kerosene rose by 98.76 per cent from ¦ 397.34 in July 2021 to ¦ 789.75 in July 2022.
The report said on a month-on-month basis, there was a 3.68 per cent increase in the product in July 2022 at ¦ 789.75 compared to ¦ 761.69 recorded in June 2022.
Similarly, the NBS said the price of refilling a 5kg of cooking gas increased on a year-on-year basis by 105.35 per cent from ¦ 2,141.59 in July 2021 to ¦ 4,397.68 in July 2022.
While on a month-on-month basis it increased by 4.25 per cent from N4,218.38 recorded in June 2022 to N4,397.68 in July 2022.
Usman said the rise in the price of the commodities was expected given the upward movement of commodity prices in both Nigeria and international economies.
According to him, it further confirms the inflation figures earlier released by NBS indicating a continuous increase in the country’s inflation rate.
“Recall that the bulk of the price increases came through food inflation, which was also influenced by the cost of energy used in the food processing for both manufacturers and households”, he said.
The Tide’s source recalls that Nigeria’s headline inflation rate increased to 19.64 per cent on a year-on-year basis in July according to the NBS.
He said that diesel, kerosine and cooking gas supply and prices had been deregulated and, therefore, not subject to subsidy of any kind from the government.
The economist, therefore, said that the prices of these products reflected the actual market prices, especially as it relates to the international crude and refined petroleum products prices.
“Our case is made worse by our inability to refine these products locally and, therefore, we have to import, which puts much pressure on the value of our local currency as compared with other currencies.
“Therefore, the implication of this is that food will now consume almost all earnings of the common man for life sustainability leaving other basic necessities unattended.
“The inability of the common man to consume other essentials of life means a further contraction of the economy”, he explained.
Usman continued that this would thereby slow down expansion in production and job creation, which further compounds the already bad situation for the common man.
According to him, the country, and by implication the common man, will have to contend with the instability and spiralling price of these commodities.
“This is pending the time we get our acts together with regards to petroleum products refining and or the resolution of the international crises that pushed crude prices up”, Usman concluded.
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Delta Targets 120MW Power Boost, Moves To Cut Reliance On National Grid
The State Commissioner for Works (Rural Roads) and Public Information, Charles Aniagwu, disclosed this at a press conference in Asaba, weekend, noting that the initiative was part of wider reforms aimed at opening up the power sector to private investors.
Aniagwu, who was accompanied by the Executive Assistant to the Governor on New Media, Felix Ofou, said the state was exploring alternative sources of electricity to support businesses, households and communities while reducing pressure on the national grid.
He said the government was particularly interested in exploiting Delta’s abundant natural gas resources for power generation, pointing to the Kwale Free Trade Zone, which is part of the state’s special economic zone, as a major opportunity for investors.
According to him, prospective investors were taken to the zone during the state’s recent economic summit to enable them to assess the availability of gas as a key raw material for electricity generation. ComparePower Rates
The commissioner explained that generating more electricity locally would not only increase supply in Delta but also free up power on the national grid for use by other consumers.
Aniagwu cited the 8.5MW Independent Power Plant located behind the state secretariat in Asaba as an example of what could be achieved through alternative power sources.
He said the facility had enabled the secretariat complex to operate independently of the national grid, thereby making the electricity that would otherwise have been consumed there available to other users.
He added that the planned 120MW partnership with Supply Power would further strengthen the state’s electricity supply capacity and provide a more reliable power base for small and medium-sized enterprises.
Aniagwu said the state government was also intervening in areas traditionally regarded as the responsibility of electricity distribution companies because inadequate power supply could no longer be allowed to constrain economic development. LearnQuantum Physics
He identified the extension of the electricity grid from Abraka towards the Ndokwa axis as one of the interventions being undertaken to connect more communities to electricity.
The commissioner, however, raised concerns over the burden placed on communities that are often required to provide transformers and other electricity infrastructure, only for distribution companies to take over the facilities and subsequently collect electricity bills without adequately accounting for the investments made by the communities.
He said the state would continue to support efforts aimed at energising communities, noting that improved electricity supply would stimulate businesses, create jobs and help tackle social problems associated with unemployment and idleness.
On regulation, Aniagwu said the government was working with the Ministry of Energy and a committee set up to develop an appropriate regulatory framework for the state’s emerging power sector. SwitchEnergy Plans
He said the proposed energy commission would be responsible for regulating new electricity producers, determining appropriate tariffs and overseeing distribution networks.
The commissioner stressed that liberalising the sector required effective regulation to protect consumers and investors, adding that decisions on power distribution infrastructure, including the use of overhead or underground lines, must take into account the peculiarities and safety requirements of each location.
He warned that power expansion without adequate regulation could expose residents to electrocution and other hazards, stressing the need to protect electricity infrastructure while ensuring consumers were not subjected to unfair pricing.
Aniagwu said the state government’s broader objective was to build an efficient and sustainable electricity market driven by private investment and capable of powering businesses, households and communities across Delta State.
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