The management of Nigeria Liquefied Natural Gas Limited, NLNG, has called for conducive environment for the Liquefied Petroleum Gas, LPG, market in the country to grow its penetration by 32 per cent from 400,000 metric tonnes per annum (MTPA) to 3 million MTPA within five years.
Managing Director of NLNG, Tony Attah, stated that a study by the firm showed that within the period of five years, the country can improve her per capita consumption of LPG from approximately 2 kilogrammes (kg) to 12kgs, adding that the country’s LPG per capita consumption was the lowest in Africa.
While stating that NLNG had taken up the drive to improve LPG usage in Nigeria, he however, said that its efforts would need to be complemented by government actions to ensure the market peaks in line with the market estimates which its study has shown.
According to him, “It is expected that an aggressive and well-coordinated market expansion strategy should lead to the growth of the Nigerian LPG market at annual rate of up to 32 per cent from the current level of over 400,000MTPA to over 3 million MTPA in five years with a potential increase in per capita consumption from approximately 2kgs to over 12kgs, well above the sub-Saharan average of 3.5kgs per capita”.
He explained that, “There are still other bottlenecks beyond our control which frustrate the full-fledged development of the market including the dearth of investments in LPG reception facilities and supply infrastructure, throughput challenges, as well as onerous fiscal regime and regulatory environment, such as the imposition of value added tax, VAT, on LPG produced in the country while the volumes imported are granted VAT waivers; all these continue to hinder overall step change growth in the industry.”
It was stated that “NLNG commenced the supply of Liquidfield Petroleum Gas (LPG) otherwise known as cooking gas to the domestic market in 2007 when refineries became challenged and supply was grossly inadequate, thus ensuring LPG supply availability and affordability in the domestic market.
“The intervention, which is in line with company’s vision of “helping to build a better Nigeria” has significantly contributed to the stimulation and development of the domestic LPG market both in terms of increaed private sector investment across the LPG value chain as well as increased consumption which has grown from less than 40000 metric tonnes in 2007 to over 320000 metric tonnes in 2015.
“NLNG is commited to delivering 250000 tonnes of LPG into the Nigerian market annually and has signed Sales and Purchase Agreements (SPAs) with 21 off-takes (all Nigerian companies) for the lifting of LPG for the domestic market.