12 December 2016, Abuja – The Federal Government has been systematically reducing the importation of House Hold Kerosene in a bid to increase domestic consumption of liquefied petroleum gas by various homes across the country.
Vice-President Yemi Osinbajo recently stated that Nigeria spent $1bn as subsidy on kerosene in 2015 and stressed that this was because of the massive dependence on kerosene and firewood by millions of households in the country.
He, however, declared that the government had decided to unlock the domestic LPG value chain as this was one policy that the current administration was passionate about since Nigeria had one of the largest gas reserves in the world.
Also, to deepen the LPG usage, the government recently constituted an inter-ministerial committee to expand the use of the LPG, chaired by Osinbajo.
In the NBS report, which was obtained by our correspondent in Abuja on Friday, the bureau stated that a total volume of 86.031 million litres of kerosene was imported in May. The volume dropped to the 34.137 million litres in September.
A further analysis of the report showed that the country recorded a reduction of N6.369bn in the amount spent on kerosene importation during the review period.
In May this year, a total of N10.61bn was spent on kerosene importation, while the figure dropped to N4.25bn in September.
The Federal Ministry of Petroleum Resources and the Nigerian National Petroleum Corporation had both canvassed the increased use of cooking gas as opposed to kerosene.
Both organisations recently stated that the gas sector had the potential to revolutionalise Nigeria’s fuel consumption, as they noted that a gas policy was being developed to address the country’s gas development issues.
Operators, however, observed that despite the progress recorded in the domestic LPG sub-sector, there were still bottlenecks frustrating the full-fledged development of the market.
The bottlenecks included dearth of investments in the LPG reception facilities and supply infrastructure; throughput challenges as well as fiscal regime and regulatory environment such as imposition of value added tax on the LPG produced in the country while the imported product was granted waiver.
According to them, prior to 2007, theLPG was simply too elitist and the chain of supply was unsustainable, not until the intervention of the Nigeria Liquefied Natural Gas company when it dedicated 150,000 metric tonnes of the LPG to the domestic market.
“The volume was increased to 250,000MT in 2012, and from a pricing perspective, these efforts have helped to reduce the price of a 12.5kg cylinder by more than 50 per cent,” the Managing Director, NLNG, Mr. Tony Attah, said.