The Nigerian Liquefied Petroleum Gas Association (NLPGA),
investors and stakeholders in the liquefied petroleum gas (LPG) industry have
discussed on how to tap into the over $10billion investment opportunities that
would be unlocked by the national LPG policy unveiled by the Federal
Government.
The discussion took place at the NLPGA’s annual Chief
Executive Officer’s Breakfast Meeting held in Lagos. The meeting brought
together LPG producers, marketers, International Finance Corporation, UBA,
Sterling Bank and other stakeholders who shared ideas on the investment opportunities
that are expected to be created by the national LPG policy and how industry
operators tap into them.
NLPGA’s Executive Secretary, Mr. Joseph Eromosele, e
explained that the overall goal of the LPG policy was to promote the wider use
of LPG in domestic activities, power generation, autogas and industries while
increasing national consumption to five million metric tonnes in five years.
According to him, over $10billion can be generated if 50 per
cent of the current kerosene and firewood users in the country switch to
cooking gas by 2019. This, he added, offered huge investment opportunities for
LPG players.
He said: “Only five per cent of the Nigerian population
utilises LPG for cooking while 56 per cent depends on firewood and 27 per cent
on kerosene. Over 30 million households and more than 100 million Nigerians
depend on firewood as a source of energy for cooking but this has come with
collateral damage to human health, environment through deforestation, and the
economy. With the LPG policy, we will be able to drive broader penetration of
LPG into homes, especially the low-income households in rural areas.
“Over $10 billion will be generated for the economy from the
switch of 50 per cent kerosene and firewood users by 2019. Estimated 500,000 – 1,000,000 jobs will be
created in the LPG value chain within the next two years with the planned
Kerosene to LPG switching programme.”
The Deputy President, NLPGA, Mr. Nuhu Yakubu, said the
policy also aims to use LPG to displace low pour fuel oil (LPFO) and diesel as
popular fuel among industrial users while deepening applications in agriculture
and commercial establishments.
“Yakubu said: “The policy will also promote the use of LPG
for off and on grid power generation. It will provide the environment for the
use of LPG in the automotive industry with a target conversion of 10 per cent
of the country’s vehicle population. These are investment opportunities for
industry stakeholders.”
The Programme Manager, National LPG Expansion Implementation
Plan in the Office of the Vice-President, Mr. Dayo Adeshina, lamented that 18
states in northern Nigeria are currently suffering from desertification and
deforestation because several millions of the citizens rely on firewood for
cooking.
Adeshina warned that if the situation continues unchecked,
states in the southern part of the country could soon start experiencing
deforestation, a development he said shouldn’t be allowed.
He noted that only increased utilisation of LPG could halt
deforestation, which is fast encroaching into new areas of the country.
Adeshina added that to deepen LPG usage, more investments were needed in local
gas cylinder manufacturing and urged NLPGA members to begin to look at the
direction especially with a national LPG policy now in place.
He decried the shutdown of two cylinder manufacturing plants
in Nigeria, adding that some investors had signified interest in manufacturing
cylinders in the country.
Participants at the meeting noted that though the nation’s
total domestic LPG consumption had grown from just below 70,000 tonnes in 2007
to 500,000 tonnes in 2016, the improvement in the domestic consumption of LPG
only translated to a per capita consumption of only less than 2.5kg. This was
compared to the low per capita consumption in selected African countries like
South Africa at 7.28kg, Ghana at 9.45kg, and Morocco at 66.27kg, they added.
According to the participants, some factors responsible for
the low consumption level in Nigeria inadequate supply of LPG equipment, high
cost associated with the acquisition of cylinders and LPG stoves, insufficient
number of jetties and LPG inland storage facilities, excessive import duties
and VAT on LPG equipment, and inadequate road and transport network facilities.
They also noted lack of access to long-term funds for LPG project in the
country and blamed the banks for that.
Representatives of some of the banks at the meeting
enlightened the LPG operators on what they needed to do to attract funding from
the banks.
The meeting ended with the confidence that the LPG policy
would spur a revolution in the LPG industry and urged the government to ensure
that the policy is fully implemented to the benefit of all Nigerians.
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