Operators predict boom in LPG market

cooking gas13 March 2014, Lagos – As the subsidy on kerosene becomes increasingly unsustainable, fueling concern that the price of the product will soon go up in the event of the imminent removal of the subsidy, marketers of Liquefied Petroleum Gas (LPG), otherwise known as cooking gas, have predicted a boom in the market.

The President of the Nigerian Association of LPG Marketers (NALPGAM), Mr. Basil Ogbuanu, told THISDAY that with the increased supply of LPG to the Nigerian market by the Nigeria Liquefied Natural Gas (NLNG) Limited, coupled with the huge subsidy spent by the Federal Government on alternative fuels, a revolution in the LPG market was imminent.

He said the NLNG had increased its supply to the domestic market from 150,000 metric tonnes to 250,000 metric tonnes yearly, adding that NALPGAM has to take deliberate steps to sensitise its members on the impending boom, so that they can analyse their strengths and weaknesses.

“The boom in the LPG market will be similar to the revolution in the telecommunication sector. As the growth trend of the LPG market is on the increase, we want our members to know of this impending revolution so that they will be prepared to make the product available and affordable,” he said.

Ogbuanu said the number of companies licensed to lift NLNG product had increased from six in 2007 to 13 in 2014, adding that because of the guaranteed coastal supply of LPG, additional terminals had also been built in the country.

He listed the new investments to include a 4,500 metric tonne capacity LPG terminal by NIPCO Plc; 8,000MT facility by Navgas Limited; 1,500MT terminal by Forte Oil, in addition to the existing 4,000mt terminal by the Pipelines Products and Marketing Company (PPMC), a subsidiary of the Nigerian National Petroleum Corporation (NNPC).

Also in a separate interview, the Chief Operating Officer (COO) of Greenfield Integrated Energy Services Limited, a leading marketer of LPG in the country, Mr. Gbenga Falusi, told THISDAY that NALPGAM would organise a sensitisation conference next week to showcase the strengths and weaknesses of its members and their preparedness to harness the opportunities of the impending boom in the LPG market.

Falusi, who is also the Secretary of the Planning Committee of the Conference, said other relevant stakeholders such as the Department of Petroleum Resources (DPR) and the Standards Organisation of Nigeria (SON) would also be involved in the conference.

He said the era when LPG was regarded as elitist product was over adding that the product is now available and affordable to the poor.

Falusi commended the NLNG for making LPG available to the Nigerian marketing and ending the era of import-dependency, especially as no products were coming from the refineries when NLNG intervened in 2007.

“Today, we enjoy relative stability in supply. However, pricing has been erratic, unstable, unpredictable and constantly fluctuating. The reason is occasioned by the international price benchmark adopted by the NLNG. Appropriate pricing template should be developed. Appropriate domestic pricing should be developed since their product is dedicated to the Nigerian market,” he said.

He decried what he called indiscriminate deployment of LPG skid plants, saying NALPGAM will use the conference to notify all relevant stakeholders of the potential dangers.

“We are not against deployment of skid plants but we want it to be done in such a way that safety is not compromised. Beyond the issue of opportunities and success story, members of NALPGAM have common business interest, which should be placed above other business interests, without compromising safety. If, for any reason, there is accident in any of these skid plants, the adverse effects will affect the entire industry,” he added.

Falusi said NALPGAM seeks to partner Lagos State Ministry of Energy and commended the state government for its Eko Gas Scheme, aimed at encouraging the use of LPG in the state.



– Ejiofor Alike, This Day
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