A Review of the Nigerian Energy Industry

NLNG/NIMASA row: Marketers turn to Niger for LPG

nlnglogo16 July 2013, Lagos – The row over levy between the Nigeria Liquefied Natural Gas Limited, NLNG, and Nigerian Maritime Administration and Safety Agency, NIMASA, has forced liquefied petroleum gas, LPG, dealers in the country to import the product from neighbouring Niger Republic to meet local demand.

NLNG which accounts for 150,000 Metric Tonnes of LPG yearly from its Bonny Island plant in Rivers State, has been blockaded by security forces attached to NIMASA over none payment of tax to the Federal Government.

As a result of NIMASA’s action, LPG terminals in Lagos have exhausted their supply leading to artificial scarcity, thereby leaving dealers with the option to import from Niger Republic.

President of Nigeria LPG Association, NLPGA, Mr. Dayo Adeshina said 10 of the companies appointed as off-takers to lift the product in vessels and sell to the local market have paid for the products but are to receive them due to the row between the two government agencies.

“As we speak, none of the terminals have supply in Lagos since NLNG was not allowed to sail from Bonny to Lagos and the owners have paid for their products to be supplied here in Lagos. The prices of the little that is left have been sky-rocketed

“NIPCO will run out of stock very soon if they have not already run out and we are left with the option to import this product that we are abundantly blessed with but we hope that the Federal Government will relax the rules guiding the importation of LPG,” he said.

Commenting further on the LPG supply from Niger Republic, Adeshina said the country cannot meet the demand of one state in Nigeria, adding that the Federal Government should intervene on the issue between the two agencies.

“It is rather unfortunate that this is happening at this time. This the first major disruption of NLNG supply since it began operation in 2009 and it is happening at a time when government has commenced enlightenment campaign on LPG usage in the country. No doubt it will affect government effort negatively,” he said.

Meanwhile, concern has been raised over the safety and standard of LPG from Niger Republic, which is already in the country. LPG from the country allegedly contains 50 per cent of propane.

National President, Liquefied Petroleum Gas Retailers Association of Nigeria, LPGARAN, Michael Umudu said LPG from Niger Republic is not against the laws of Nigeria.

He explained that the Department of Petroleum Resources, DPR, and Standard Organisation of Nigeria, SON, agreed that LPG can contain up to 50 per cent of propane but not be more than that, while brutane can be above 50 per cent.

He said : “The current LPG standard by SON says that propane content should be a maximum of 50 per cent and Niger Republic gas meets the standard. But stakeholders have been expressing concerns over the safety of LPG with high amount of propane, such as the one being imported from Niger owning to the fact that there is a lot of substandard and out dated equipment and accessories such as cylinders, storage tanks, hose, pipe cookers in the Nigeria market.

“This led to the review of existing standard by SON Technical Committee on LPG. The committee met in Lekki Lagos in February this year and held its final meeting in NICON Luxury Hotel in Abuja on the 10th of June, where new standard was set. The new standard will take effect whenever SON publishes.

“As we speak, to get LPG from the market is like going to the war front and the prices of the little that is available is already on the high side. This week will be very tough for LPG users in the country”.

Umudu admitted that gas from Niger still finds its way into the country but the percentage is too low to cushion the effect caused by NLNG and NIMASA face off.

– Vanguard.

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