Sunday, 1 May 2016

LP GAS DEALERS SUFFER AS POWER SUPPLY IMPROVES

Fair is foul and foul is fair rightly sums up how liquefied petroleum gas dealers have suffered at the hands of improved power supply in the country.

It is not all rosy in the LP gas industry as the electricity supplies has improved significantly since the turn of the year. With a number of multi-billion power deals being work in progress up to 2018, electricity supply in the country is likely to improve.


Government is implementing various projects to increase power availability. These include expansion of Kariba Hydro Power Station and Hwange Thermal Power Station. The two projects will add a total of 900 megawatts to the national grid. The Kariba project is already 40 percent complete while Hwange is 5 percent complete.

Whilst other power projects are still in their infancy, LP gas dealers are already feeling the pinch.
In a random survey conducted by The Sunday Mail Extra gas demand has significantly dropped at various vending stations.


One of the gas re-sellers at the corner of Fifth Street and Central Avenue said: “Over the past three to four months LP gas demand has declined significantly as we used to get around $200 per day in November, with sales averaging 100kg. Now we can go up to a week without selling $100 worth of gas since very few people are coming to fill their (gas) tanks.

“The ever present supply of power has severely affected our business over the past months. However, I am not going to review my selling price from $2 per kilogramme as I want to maximise from what I have.”

According to figures obtained from the Zimbabwe Energy Regulatory Authority (Zera), LP gas usage went up to 1,5 million kilogrammes in 2015 from around 820 000 kilogrammes in 2013.

Gas as an energy source for cooking has increased in popularity, as well as an alternative to firewood.
The authority is on a campaign to promote the safe use of gas. The authority is also advocating for the widespread use of biogas, which is in abundance.


Given the improved supply of electricity, only those who prefer to use gas to electricity for cooking and those who live in areas with no electricity are the ones who still go for the LP gas.

Zesa spokesperson, Mr Fullard Gwasira, said imports and improved generation at some local units has helped to increase availability of electricity.

“I’m sure you have noticed that from January 5 there hasn’t been load shedding anywhere in Zimbabwe,” bragged Mr Gwasira. “We have an importation programme in place, we are getting power from Mozambique and South Africa.”

Zesa is paying 15,5c per kWh for imports from Mozambique and 13c per kWh from South Africa. Though it charges 9,89c per kWh.

The country, whose peak electricity demand is 2 200 megawatts a day, now produces 979 megawatts a day, an improvement from around 500MW last year.

Big retailers of the commodity include Zuva, Boc Gas, Redan and Kenysys Gas have cut supplies in some of their outlets as demand continue to fall each day. The average price of LP gas has fallen from $2 per kg to $1,50 a kilogramme.

Suppliers believe that prices will continue falling as supplies improve. “There is huge investment in LPG production throughout the world with it being produced from natural gas sources and crude oil refining. This means that LPG will be readily available for the foreseeable future and its increased supply will result in lower prices,” a local supplier, who declined to be named, said.

 

0 comments:

Post a Comment