Nigeria’s LPG production hits 5mt, utilises 8% domestically

LPG plant

The Federal Government says Nigeria currently produces about five million tonnes (MT) of Liquefied Petroleum Gas (LPG) annually, and only eight per cent of the production is being utilised domestically, with the bulk being exported.

It also said domestic LPG production stands at about 45% of annual consumption, with the Nigerian LNG Limited (NLNG) supplying 450,000mt per annum while 55% is imported.

Special Adviser to the President on Economic Matters in the Office of the Vice President, Dr Adeyemi Dipeolu, disclosed this on Wednesday at the India-Nigeria Liquefied Petroleum Gas (LPG) Summit, in Abuja.

The India-Nigeria LPG summit was hosted by Nigerian National Petroleum Company Limited (NNPC Ltd.) with the support of the Office of the Vice President and World LPG Association (WLPGA).

The summit is expected to translate into bilateral exchanges to foster mutual collaboration and opportunities for the Nigerian LPG industry to learn from India’s experience, one of the world’s most successful national LPG penetration initiatives.

In a keynote address, Dipeolu said Nigeria had the ninth largest proven natural gas reserves in the world, and also the second largest producer of LPG in Africa after Algeria.

“LPG adoption in the Nigerian market, of course, is still very low with per capita consumption at about 1.8kg, which is below the West African average.

“The household energy mix in Nigeria is about 5% LPG, 65% biomass and 30% kerosene.

“The preference for the use of other sources is largely due to high switching costs associated with the acquisition of cylinders and LPG stoves, lack of awareness of associated benefits and safe LPG handling across consumer bases.

“There is also the high cost of LPG in comparison with alternative fuels, insufficient and inappropriate cylinders in circulation and inadequate infrastructure, especially trucks, roads, rail pipelines and plants,” he said.

He said the predominant use of biomass for household cooking resulted in deforestation and ambient air pollution, which also could lead to death due to stroke, heart disease, lung cancer and chronic respiratory diseases.

There is also the high cost of LPG in comparison with alternative fuels, insufficient and inappropriate cylinders in circulation and inadequate infrastructure, especially trucks, roads, rail pipelines and plants.

The Presidential Aide underscored the imperative for policies, incentives and investment to grow the Nigerian LPG market.

This, he said, will make cleaner fuel available, accessible and affordable, not only for household cooking, but also in autogas, captive power generation, heating and cooling as well as agriculture and industry.

He expressed optimism that Nigeria will learn from India’s experience with the Pradhan Mantri Ujjwala Yojana (PMUY) scheme implemented by the Indian Government in May 2016, such that LPG penetration in that country increased from 62% to 100% currently.

He said the theme of the summit, “Energising the Future: Leveraging the Indian Experience to Achieve Nigerian National LPG Aspiration,” underscored the need for cooperation and collaboration between the two countries.

Dipeolu said the cooperation should dwell on policy structures; health, safety and environmental methods and standards, ICT, infrastructure management techniques, stakeholder engagement and innovative programmes to incentivise Nigerian LPG market growth.

According to him, the recently enacted Petroleum Industry Act (PIA) specifically provides enablers for robust midstream and downstream gas development through promotion of policies, incentives and waivers to stimulate investments.

Others, he said, included the removal of value added tax (VAT) on domestic LPG, presidential waiver on duty imported LPG equipment, tax holiday on new investment on gas and approval of eight new LPG terminals and storage facilities to add 150,000mt gas capacity. (NAN)

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