Despite the intervention by the FG, an expert notes that the prices of cooking gas remain elevated.
Despite the Federal Government’s efforts to lower the price of Liquified Petroleum Gas (LPG), commonly known as cooking gas, the cost continues to rise, according to economist Dr. Ayo Anthony.
In an interview in Abuja on Sunday, Dr. Anthony acknowledged that the impact of government policies on the economy takes time to materialize. The government had recently removed customs duty and Value-Added Tax (VAT) on LPG importation to address the price increase.
Minister of State for Petroleum Resources (Gas), Ekperikpe Ekpo, also formed a committee to recommend ways to boost supplies and reduce LPG prices.
Dr. Anthony explained the concept of lag in economics, distinguishing between inside lag and outside lag. Inside lag is the time it takes for the government to decide on a course of action in response to a problem, while outside lag is the time it takes for the decision to be implemented.
Bureaucratic processes can cause delays in implementation, contributing to the time it takes for government policies to have an impact.
One factor affecting the high cost of cooking gas, despite the removal of VAT, is the presence of old gas stock. Cooking gas stocked by marketers before the policy change is still being sold at the old price to cover importation costs.
Dr. Anthony noted that sellers will continue to sell existing stock at the previous price until it depletes, and new purchases reflect the revised government policy.
Recent data from the National Bureau of Statistics revealed an increase in the average price of 5kg cooking gas from N4,562.51 in October 2023 to N4,828.18 in November 2023. The average cost of refilling a 12.5kg cooking gas also rose by 5.78% on a month-on-month basis, from N10,545.87 in October 2023 to N11,155.15 in November 2023.
Source:
PUNCHNG
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