The Nigerian Liquefied Petroleum Gas Association (NLPGA) has stated that over $10 billion of investments would be generated if 50 per cent of the current kerosene and firewood users in the country switch to cooking gas by 2019 and urged investors and operators in the Liquefied Petroleum Gas (LPG) market in the country, to tap into the investment opportunities to be unlocked by the national LPG policy of the federal government.
The NLPGA made this call during its annual CEOs’ Breakfast Meeting held recently in Lagos, where LPG producers, marketers, IFC, UBA, Sterling Bank and other stakeholders brainstormed on the investment opportunities that are expected to be catalyzed by the national LPG policy.
NLPGA’s Executive Secretary, Mr. Joseph Eromosele explained in his opening remarks that the overall goal of the LPG policy was to promote the wider use of LPG in domestic, power generation, autogas and industries while increasing national consumption to five million metric tonnes in five years.
According to him, over $10 billion would 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.
“Only five per cent of the Nigerian population utilises LPG for cooking while 56% 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 (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,” he explained.
The Deputy President of NLPGA, Mr. Nuhu Yakubu said the policy also seeks to use LPG to displace LPFO and diesel as popular fuel among industrial users while deepening applications in agriculture and commercial establishments.
“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,” he added.
In a similar vein, the Programme Manager, National LPG Expansion Implementation Plan (Office of the Vice-President), Mr. Dayo Adeshina, noted 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 states in the southern part of the country could soon start experiencing deforestation, if the situation in the north remained unchanged.
He argued that only increased utilisation of LPG could halt deforestation, which is fast encroaching into new areas of the country.
CEOs present at the breakfast 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, they said, was low compared to the per capita consumption in selected African countries like South Africa at 7.28kg, Ghana at 9.45kg, and Morocco at 66.27kg.
Some factors responsible for this as identified by the CEOs include the massive 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.