NLPGA wants FG’s commitment to promote LPG consumption

The Nigeria Liquefied Petroleum Gas Marketers Association (NLPGA) has urged the Federal Government to show more commitment to developing policies that will promote consumption of Liquefied Petroleum Gas (LPG) otherwise called cooking gas in Nigeria.

Speaking with the Nigerian Tribune about the sectoral performance in the year 2016, Mr Dayo Adesina, President, Nigeria LPG Association stated that Nigerians were beginning to embrace LPG as an alternative source of energy because “last year, we went beyond the 250,000 tonnes threshold. In 2016, Nigerians consumed more than 500,000 tonnes of cooking gas and this showed that the potentials will continue to increase.

“2016 marked another turnaround for the industry as subsidy on kerosene was reduced substantially and LPG should play a significant role in reducing/removing subsidy on kerosene. In 2016 also, the Federal Government showed great commitment to GreenHouse Agreement and LPG is going to play a significant role in helping the government to achieve that.”

However, he said because of the growing potentials of LPG in Nigeria, there is need for the Federal Government to show more commitment by addressing some factors that continued to affect and hinder the growth of the industry in Nigeria.

He mentioned the factors to include tariff on LPG equipments.

According to him, “LPG equipment are imported and the tariffs on these equipment have increased tremendously. The local tools manufacturing company that used to give us some of these components is shut down and we are hoping for incentives from the government so that the tariffs won’t be high.

“For the first time, we saw federal government making pronouncements through the Vice President, Professor Yemi Osinbajo, on LPG. It showed a clear cut commitment to transit millions of Nigerians to LPG usage. However, we were shocked when the list of tariffs came out and we didn’t see anything relating to LPG on the lists which showed there is a disconnect somewhere and we hope that this will be addressed in the shortest possible time frame.

“This is because everything has a multiplier effect and it is very important the government goes through with those things we suggested. If government intervenes, we can shift from 500000 tonnes per annum to 2 million tonnes per annum.

In Nigeria today, LPG focuses on domestic consumption like cooking but it can be utilized in other areas like auto gas to power generation to agriculture, industrial usage and so on.

Apart from providing cleaner energy which doesn’t pollute the environment, LPG can be used as revenue generation tool by the government with effective policy that will drive tax collection and generate more employment. In fact, we can build a multibillion dollar business from LPG in an enabling environment.”

On the chances that the federal government will show more commitment as envisaged, he posited that “We expect to have greater collaboration with the government this year. This is a deregulated product/industry and what we want from the government is support in areas like tariff and duties reduction on imported LPG equipments, concession for foreign exchange. We expect better engagement from government in areas of tariff and intervention fund.

“By third quarter (Q3) this year, we hope that the decision that will attract more investors would have been taken. This is because as a deregulated market, more investors are coming and this will drive more competition. We need more production from the marginal field operators that will guarantee gas supply so that gas that used to be flared can be converted into LPG.”

Moreover, Adesina emphasized the importance of safety regulation in the industry and urged the regulators to beam their searchlight on the activities of illegal operators of LPG skids.

“Safety is another issue we don’t compromise. Lots of illegal operators in the industry is a source of concern to us and we will continue to engage the regulators to clamp down on these illegal operators. We don’t want any incidents again.

“Before you can build a skid, DPR supposed to visit the site, you need to submit your ATC drawing and the DPR must confirm the viability of the site. The rule says there must be fire extinguisher but I don’t think these people put all these into consideration.

“Unfortunately, people don’t care about the legality or otherwise of these operators. All they care about is to fill their cylinder,” he said.