A Review of the Nigerian Energy Industry

Cylinder shortage threatens 250,000MT cooking gas market

cooking gas18 March 2014, Lagos – Inadequate supply of cylinders is threatening the 250,000-metric-tonne Liquefied Petroleum Gas (cooking gas) market in the country.

The problem, if not addressed, will limit the consumption level of the product in the country, which is still grossly low when compared to other African countries.

The National President, Nigerian Association of LPG Marketers, Mr. Basil Ogbuanu, said unless the Federal Government intervened and ensured that gas cylinders were available and affordable to the citizens, the consumption rate would not increase.

He said this had become imperative following the unavailability of household kerosene despite the huge amount of money spent on subsidising the product by the government.

Without bridging the cylinder gap, Ogbuanu predicted a drop in LPG consumption, while kerosene might be unavailable to the masses.

He said, “We all know that you can use gallons to buy kerosene, but you need cylinders to buy cooking gas. These cylinders are not enough in the country.

“The companies producing cylinders locally have all folded up due to unfavourable government policies and inadequate power supply. Now, we import all cylinders that are being used in the country. A standard cylinder of 12.5kg will cost about N8,500 in the market, which average Nigerians cannot afford.

“Instead of the Federal Government reducing the import duties payable on imported cylinders, it increased it from five per cent to 20 per cent.”

Ogbuanu also appealed to the Federal Government to intervene and ensure that the Nigerian Liquefied Natural Gas supplied cooking gas at domestic rate rather than the current international price at which the company was selling to domestic consumers.

“The issue of domestic pricing is another factor militating against increased consumption pattern of cooking gas in Nigeria although we recorded an increase in the consumption rate last year. This is because Nigerians consumed 170,000 metric tonnes of cooking gas as of December 2013,” he said.

The NALPGM president urged the Federal Government to use 20 per cent of the amount being spent on kerosene subsidy to provide gas cylinders in the country.

“It is becoming clear that subsidy payment on kerosene is not sustainable. If the Federal Government can use only 20 per cent of what it is using on kerosene to support cooking gas consumption, it will deepen the market,” he added.

Speaking on the on the forthcoming LPG conference holding in Lagos State, the Chairman, Conference Organising Committee, Mr. Gbenga Falusi, said the forum, with the theme: ‘Cylinder and the future of LPG in the Nigerian economy’, was aimed at sensitising stakeholders that the government needed to be committed to growing LPG consumption in the country.

“LPG will boost the GDP, provide employment and create a friendly environment without emissions. We commend the Nigerian Liquefied Natural Gas for its timely intervention in LPG supplies, but we want the company to fast track the West African gas price index it is developing,” Falusi said.


– The Punch

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