Fakoyejo OlalekanThe Nigeria Liquefied and Natural Gas (NLNG) has declared force majeure following the flood that as ransacked 27 of Nigeria’s 36 states in one month, and this could lead to cooking gas scarcity.
With over 600 people reportedly dead and 1.4 million displaced, Nigeria Liquefied and Natural Gas joined its upstream gas suppliers to shutdown operation.
In a statement on Monday by the firm’s spokesman, Andy Odeh, the Nigeria Liquefied and Natural Gas said it is yet to ascertain the extent of the impact the flood has on its operation.
It was gathered that gas production has been shut-in by the upstream gas suppliers due to the flood, and as a result, it has disrupted gas supply to NLNG.
Odeh told Reuters that, “The notice by the gas suppliers was a result of high floodwater levels in their operational areas, leading to a shut-in of gas production which has caused significant disruption of gas supply to NLNG.”
The impact of Nigeria’s flood, NLNG force majeure on cooking gas price
The force majeure will affect global gas supply which has already been suffering from sanction placed on Russia, as Europe look for an alternative to commodity coming out of Vladimir Putin’s country.
It will also affect availability of cooking gas in Nigeria, compounding the supply challenges faced by Nigeria Liquefied and Natural Gas. Already, due to crude oil theft, the firm is producing below capacity, recording 68% output.
This will increase cost of gas price in Nigeria, thereby, aiding rise in cost of living in the country unable to keep its inflation down, having recorded 20.77% rate in September, up from 20.52% of August 2022.
Note that prior to the flood forcing NLNG to shutdown operation, average retail price of 12.5kg cooking gas had increased from N9,824.07 in July to N9,899.34 in August 2022. In August last year, the price was N4,514.82, according to NBS report.
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