 A liquefied petroleum gas, LPG or kooking gas is now beyond the reach of the average Nigerian as many have turned to charcoal or firewood. A kilogram of kooking gas is now 625 mAh or more, depending on the location, for the many household and eateries, especially in urban centers, perceive alternative lengths of kooking. Now, despite being preserved, Nigerians grow as kooking gas prices now keep soaring. This will form our major discussion today on business insights and plus TV Africa. I am Justin Acadone. A forex allocation, fuel subsidy, import index, medium term expenditure framework and fiscal strategy paper rounded the news on business this week. Here are the highlights. The governor of the central bank of Nigeria, CBN Godwin Imefili says the apex bank will consider approving foreign exchange for customers with legitimate demands to exceed transaction limit as long as such application meets tupilated requirements. These, as the apex bank had insisted that he would no longer allocate dollars to Barood Assurance operators who then sell to criminals and terrorists who buy weapons that are used to hotline Nigerians. Imefili was giving the assurance following various complaints by various customers that the $5,000 transaction limit as tupilated in the current forex policy is inadequate and may not meet their actual needs. Patrol consumption in the country jumped from 55.59 million liters a day in April to 72.07 million liters per day in the months of May. This shows that in the month of May, patrol consumption in the country was 16.48 million higher than the consumption in the month of April. This also means that within the period the country's daily consumption of patrol by 29.65 percent between April and May. The management of the Nigerian LNG Ltd has said that the marketers did not have enough infrastructure to take up its liquefied petroleum gas supply. The independent Petroleum Marketers Association had said that the major cost of the rising cost of cooking gas was lack of adequate supply. The marketers claimed that the foreign investors under estimated demand in the Nigerian market resulted in marketers venturing into importation of the product. They advocated that the government should let the LNG supply more gas to market to reduce the cost. The all commodity group import index and average grew marginally by 1.07 percent, driven mainly by products of chemical and allied industries, wood and articles of wood, wood shackle and articles, paper making materials, paper and paper board in the second quarter. The National Bureau of Statistics disclosed this in its report titled Commodity Price Indices and Terms of Trade, second quarter 2021 on Wednesday. It's said that the all commodity group export price index averagedly increased by 0.72 percent due to declines in the price of chemical and allied industries, plastic robbers and articles, turf and minerals product. The Senate has passed the 2022-2024 mid-term expenditure and physical strategy paper, retaining all the assumptions and projections submitted to it by the president, Mohamed Abouhari, in July. The red chamber retained the exchange rate of 410.15 per dollar proposed by the executive and approved the projected gross domestic product growth rate of 4.20 percent. The Senate retained the projected inflation rate of 13 percent fiscal deficit estimated of 5.62 trillionaire. And those were the roundup of business news. Now the Nigeria Liquified Natural Gas Limited says marketers were unable to offtake the full 450,000 metric tons of liquefied petroleum gas, LPG, allocated to the Nigerian market by the company due to various factors. The marketing manager of the NLNG, Austin Obobo, said this while speaking to journalists in Lagos, Obobo says the NLNG is not responsible for the supply shortfall of the LPG, also known as kooking gas, and a consequent price hike across the country. Who or what is responsible? We're now being joined by the group Chief Operating Officer at Swift Oil Limited, Wallaon, or Lodger. There are many things for joining us on Business Insight on PLOS TV Africa. Yeah, good evening, Justin. A quick point of correction, I am no longer the Chief Operating Officer for Swift Oil. All right, points are noted. I would just refer to you as an economist there. Now let's get into the business of the day. Despite a proven estimate of 206.53 trillion standard cubic feet of natural gas deposits in Nigeria, as of June 2021, the price of kooking gas has surged higher beyond the reach of Nigerians with five increases recorded in three months. How do you explain this anomaly? It's a mix of a few things. Number one is, the primary problem has to do with the supply problem. Then you can come to the effects problem on the other side. The supply problem is further complicated by the infrastructure problem. So energy provides some of the local consumption. But this local consumption, whether it is coming from LNG or even this imported, requires certain infrastructure. Number one, you have the storage facilities. These are very sensitive products. They have to be stored under certain conditions in an appropriate environment. Number two is the transport infrastructure. So there is a storage infrastructure which is a problem. There is a transport infrastructure which is another problem that is part of what is affecting the price that we're beginning to see or that we see from time to time. There is also the complexion of the side that it seems to have seen the demand in all the parts of the world, Europe and the rest of them, has extended a little bit by virtue of sustained cold temperatures. So that is also part of the problem. I think that part is minor. The issue of infrastructure compounded by importation. There are infrastructure issues now because LNG is not providing 100% of what we need in this market. There are various figures that are out there. Sometimes LNG says they provide up to 80%. There are market watchers who think they don't provide up to that volume. So the rest of what the market needs is important. When you import, then you deal with the effects related to issues. We all know how Naira has depreciated against the dollar consistently over several months in Nigeria. So anything that involves foreign exchange wants to be likewise affected. These are the mix of factors that are given rise to the price increase we are seeing in the market. All right. Well, let's just analyze some of the figures that we saw this week. Now the Petroleum Product Price and Regulatory Agency, the PPPRA, recently reported that the volume of LPG supplied in August fell by 20.5% to 85,264 metric tons compared to 7,000 supplied in July. What should Nigerians expect in the coming months? For them, they might be thinking of using kerosene, others are thinking of using maybe charcoal or even fireworks. So what do we expect to see in the coming months? It's difficult to say exactly. There are a few things that are beginning to happen there. Number one, and it's as the price goes up, a segment of the market has, will have affordability, has affordability problems. So that segment of the market will no longer be able to buy the industry, the product. They'll go for alternatives, alternatives like kerosene, you know, firewood or whatever that alternative is to them. So that category, that segment of the market will affect the volume of LPG that will be consumed in the next month. The other part is the ability of CBN to fund the potential of this product. I want to believe that because this is a priority policy of the government, that the CBN will make the money available. But even when the money is available, the fact that it is expensive might also affect the volume that people might be willing to bring to complement what is coming from the Nigerian financial gas company. So it is difficult to say, but let's watch that space. If the government readily provides funding and effects for all the importers to be able to import, we might see a situation in which the market is flooded and maybe the price will come down a little bit. And some of the people that got out of that market because they could not afford it might come back into the market because of the price decrease. And that might increase the consumption. But if that does not happen, we should expect that there will be a sustained decrease in the volume that we consume as a certain category of consumers. All right. That is not really what most Nigerians would want to even hear right now. But let's start and talk more. We have sampled opinions of some Nigerians. They have indeed gave different reasons for all of that. Some have said that it's the taxation element. That's the reason why. Some say that 7.5% tax on imported LPG implementation is the cost. Others have attributed it to VAT. But what exactly is the true picture? How does the 7.5% tax on imported LPG affect the price? Definitely any challenge that comes into that will affect the ultimate price. The fact is this is a contributor. But I don't think it is as significant as the impact of the foreign exchange in itself. There's also the PPRA charge anyway. And that's a non-instructive charge that PPRA introduced sometime in September 2020. PPR, PPRA, it has been argued that look, this agency is not adding any value to the process and nobody knows why is you have the right to determine, to charge anything and add to the cost in that particular space. VAT is there. Not that about that. I don't think that is going anywhere. I don't think we're going to have a situation in which we go back to a subsidy regime as far as that product is concerned. Or we go to a subsidy regime as far as that product. So the VAT has come to state. It's not about to go away. What we need to pay attention to is how we can deal with the infrastructure constraint on one side, effects provision on the other side. All right. Let's just try and get into some other issues. Stoker and Sending LPG and gas in Nigeria. Sometime in April the federal government announced plans to inject five to ten million liquefied petroleum gas cylinders into the market in the next year. It said it was to help improve safety and deepen LPG. So what is the essence of all of this if ordinarily we've not been able to put our infrastructural deficit in order and that we're still importing gas when we have huge deposits here in Nigeria? The provision of gas cylinders is taking care of another part of the entire mix and that is the cost of switching. So if I've been using kerosene before I have the stove and other apparatus that are required to come to use kerosene. If the government is trying to persuade people to cross over to another energy source, one of the things that we have to deal with is the switching cost. A major switching cost is the cylinder. There is a cost of cylinder, then there is a safety issue if people have to go for substandard cylinders. So the intervention in that area by government is to deal with that problem. That switching cost matter to ensure that people will be able to afford a cylinder and that the cylinder will have the right level of safety and we deal with the switching cost. But after the switching cost there are still all these other issues that we have to deal with. All right Abulal, you will agree with me that Nigerians over the years have actually even the average ones have actually stopped using the kerosene stove to charcoal and firewood and they have appreciated and moved on to using the LPG. What would have taught that with the NLNG and all the policies that we have in place in Nigeria that we should not be having the issue of gas shortages as it were and of course the increase in prices? Well, there is a problem with planning in Nigeria and we have to admit that. A whole lot of things are done in silence. That is why you have a situation in which we are planning for switching costs. We want to be able to take care of people's switching costs but we are not addressing the infrastructure. We are not addressing the reason why investors might not be coming in to provide those infrastructure. Is there a pricing issue as well? We are not dealing with that. So these are the complications and I think it's a money issue. Normally, if we are serious about this policy, we must look at all the contributing factors and make a concrete plan to deal with these contributing factors and taking them in silence and dealing with this problem one after the other. I remember that way back in 2017, 2018, we were trying in the organization I work for then, one of the things we were trying to do was to build a storage facility because it was observed that energy will provide gas in Goni and that gas will first of all be moved to Lagos from where it is now moved out of Lagos to all the parts of Nigeria. So you can imagine that the gas that was produced in Bayosa, first of all, got to Lagos on the four way back to Rivers. Does that look like an anomaly? That is an anomaly. But we had that kind of situation which is showing the extent of poor gas infrastructure across the nation. So whatever the government needs to do to create the right to the environment that would encourage private investors to invest more in the gas infrastructure, both the storage and the transport infrastructure, has to be addressed. Without that, we will continue to, from time to time, run into troubles with the issue of rising of cooking gas. And that policy of government will not succeed as well or as fast as it will have normally to succeed. All right. Just before we'll let you go now. Fine. You have talked about investment and all of that and of course the issue of planning. But the average Nigerian wants to be sure that he goes to maybe the depot and that he can buy maybe a 12 kg cylinder for us later as maybe 2009. When do you think in our history that we can get to a point where we can actually use this renewable sources and then show that we are not damaging the climate and the environment when we fall back to all of this charcoal and firewood? The question right now would be, would we get to a point where gas supply and the price can be very minimal to the extent that even in the hinterlands, that would be the major source of gas or fuel for cooking? I think we can get there. And the reason is this, even in other parts of West Africa where they do not have gas, the penetration of LPG usage is higher than Nigeria. So the percentage of the populace that is using gas to cook in Ghana is smaller than Nigeria where we have the gas. So it means that it's a matter of getting our acts together and be serious about doing this. I also believe that the recently passed PIA might have an implication that will help us. The industrial industry bill affects not just PMS or crude oil, it also has an application for gas. And one of the most important parts of that act is that it liberalizes that segment and cuts the private investment to come in that it's more confident to come in and put more money in that segment. Once that happens and the infrastructure is there, the infrastructure is Nigerians to be able to benefit from a product that is at their backyard as it was. Not that we have to go and import to get when it is just down the road. All right, thank you so much indeed for your time and of course your input concerning this issue of cooking gas hike as Nigerians are actually feeling the bite. We do appreciate your time. Thank you very much. You're welcome. As we end the show, I would leave you with this feature on the out-of-home advertising conference organized by the Lagos State Signage and Advertisement Agency, where Governor Babajdesonglu said his administration is forced to leverage technology to become Africa's modern economy. Here are the highlights. See you again next time. I am Justin Akadonye. Bye for now. Outdoor advertising sector today is witnessing unprecedented growth in diverse forms and Lagos State is no exception. Speaking on the theme of the event, the roadmap for the growth of signage and out-of-home advertisement post-COVID-19 in Lagos State, Governor Sawolu, represented by his deputy Obafemi Hamzat, says his government will support in enhancing infrastructure by providing data to enhance capacity of small and medium-scale enterprises. We'll be able to have back all of data to our data centers that support traffic management, data collection for urban planning and of course policing our state. Our smart city plan will have a major impact on all sectors of the state economy. I also play a major role in answering the capacity of private businesses to flourish, create more wealth and employment for our young people. Commissioner for the Environment and Water Resources, Tungibelo says the conference will create a better roadmap for the out-of-home industry to foster effective collaboration with all stakeholders in the advertising sector. I have no doubt that this conference will create a better roadmap for out-of-home industry. I am particularly looking forward to the discussion of fostering effective collaboration with all stakeholders in the sector. This is the key ingredient for good sectoral relationship. Managing Director of Lagos State's Signage and Advertisement Agency, Adi Damola says the main objective of the conference is for the government to gain the confidence of stakeholders so they can invest in policies and programmes of the agency. Our new roadmap is therefore directed at driving efficiency and stimulating investment, investment capital for the industry. We are combining the use of psychology and newer sources of finance to stimulate sectoral growth, develop new routes for acquisition and ensure long-term investment for outdoor advertising infrastructure in a manner that will make the industry attractive to investors. The consensus by speakers is that the event is apt and regulators, especially LASA, must gear up to meet consumers' needs by deploying technology.