A Review of the Nigerian Energy Industry

LPG marketers seek FG intervention on NLNG/NIMASA row

Oando-LPG09 July 2013. Lagos – Marketers of Liquefied Petroleum Gas, LPG, popularly called Cooking Gas, have called on the federal government to settle the dispute between the Nigerian Maritime Administration and Safety Agency, NIMASA, and the Nigeria Liquefied Natural Gas Limited, NLNG, prevent LPG from disappearing from the Nigerian market.

The call stemmed from the marketers’ concern that the blockade by NIMASA against the operation of the NLNG Limited, which solely accounts for domestic supply of LPG in the country, has effectively stalled supply of the product to the domestic market.

Former President Olusegun Obasanjo had in 2007 directed the NLNG to set aside a portion of its LPG output for local consumption; following the failure of the Warri and Port Harcourt Refineries to produce LPG to meet the demand of the local market.

Based on this directive, the NLNG load out 150,000 Metric Tonnes of LPG in vessels yearly from its Bonny Island plant in Rivers State to Lagos, where about 10 companies appointed as off-takers lift the product in vessels and sell to the local market.

But the newly-elected President of the Nigerian LP Gas Association, NLPGA, Mr. Basil Ogbuanu, said during the weekend, that NLNG vessels no longer come to Lagos to discharge LPG as a result of the blockade by NIMASA.

He disclosed that the companies, popularly referred to as the Club of Offtakers, involved in lifting LPG from NLNG vessels in Lagos were fast running out-of-stock of the product and called on the federal government to ensure quick resolution of the dispute to save the Nigerian masses from hardship.

“None of the off-takers has gas and 90 per cent of gas plant owners in this country have no gas because NLNG vessels are no longer bringing the product to Lagos. LPG is supposed to be for everybody in this country because Nigeria has abundant gas resources. The Nigerian masses should not be made to suffer because two government agencies refused to agree. We are calling on the federal government to settle the matter for the sake of the Nigerian masses,” he said.

Ogbuanu, who is the Managing Director of Second Coming Nigeria Limited, further disclosed the NIPCO Plc was the only offtaker that had stock of the product due to the recent strike embarked upon by the NUPENG, which prevented the company from loading out LPG to marketers.

He however, stated that NIPCO had since exhausted its stock of LPG, following the suspension of the strike action by the tanker drivers.

“NIPCO had little stock which they could not load out because of the strike action but since the strike ended, they have exhausted their stock. They are no longer collecting money from the marketers because they don’t have product,” he added.

He said the alternative supply of LPG would have come from Port Harcourt and Warri Refineries but lamented that the two refineries were not producing LPG.

Ogbuanu said the current development had resulted in the scarcity of LPG as 12.5kg cylinder of gas, which was sold at N2,800 is now being sold between N3,500 and N4,500.

Immediate past National President of the Liquefied Petroleum Gas Reps Association of Nigeria, Mr. Odo Gbolahan, told THISDAY that the marketers did not anticipate the sudden disruption of LPG supply from the NLNG.

“It was too sudden and we did not plan for it. It is the little stock we have that is currently in circulation. Even the product we are getting now is from third party. The situation will get worse if the federal government does not intervene. The federal government should come in and settle this matter,” he said.

– Ejiofor Alike, This Day.

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