By Pita Ochai
Nigeria remain the largest producer of Liquefied Petroleum Gas, LPG, in Sub-Sahara Africa, but its consumption of the product still remain the lowest in the region.
According to Prince Haruna Momoh, the Managing Director of Pipelines and Products Marketing Company, PPMC, consumption figure of 1.8 kg per capita, compared to the West African regional average of 3.5kg. He said that the country consumed a paltry 30 per cent or 250,000 tonnes, out of the whopping 850,000 tonnes of Liquefied Petroleum Gas, LPG, reserved for domestic use last year. This disclosure was made by Haruna during the just concluded NALPGAM Inaugural Conference held in Sheraton Hotel Lagos, titled “Stimulating Consumption of LPG in Nigeria.”
According to Haruna, the figure of 1.8 kg per capita placed Nigeria among the lowest LPG consuming nations in Africa. “There is an urgent need to reverse this trend and join the rest of the world in maximizing the benefits of this abundant resource,” he stated.
Most stakeholders believe that billions of revenue could be saved by Nigeria if the populace embraced LPG, rather than relying on wood and kerosene for cooking. Also the resources spent on kerosene subsidy, could be put into more productive areas, such as infrastructure development, education, health and agriculture for the welfare of citizens if Nigerians use more of LPG.
But some problems, including high cost of cylinders and accessory start up kits, low public awareness, poor infrastructure, kerosene subsidy and a lack of investment in the value-chain had continued to make many Nigerians not to embrace LPG.
Nkechi Obi, the Executive vice-chair of Techno Oil Ltd,, while presenting her paper titled ‘Enhancing Liquefied Petroleum Gas Growth in the Nigerian Market’ during the inaugural NALGAM conference, argued that the way out was for government to engage a graduated removal of kerosene subsidy over a period of five years to compel Nigerians to use LPG. She suggested that government should discount equivalent of 20 percent of the value of the kerosene subsidy for every year and channel same to LPG support. She lamented that subsidizing the consumption of kerosene was increasingly becoming harmful to Nigeria’s economy.
According to her, the savings on the subsidy could be spent on the acquisition of gas cylinders to promote utilisation of LPG. “For sustainability, government should invite entrepreneurs to invest in the LPG infrastructural development the same way fuel depot infrastructural development was executed assuring investors return on investments. With all sincerity, government subsidizing kerosene is not sustainable and it is also not healthy because the world has moved on and Nigeria also has to move.
She was of the opinion that government should install an agreed programme that would ensure that the subsidy removal would not create more problems nor hurt the citizenry unduly,” he said.