29 November 2016, Abuja – Vice President Yemi Osinbajo, Tuesday, lamented the low usage of Liquefied Petroleum Gas, LPG, also known as cooking gas, in Nigeria, while he disclosed that the Federal Government spent $1 billion on kerosene subsidy in 2015.
Using current Central Bank of Nigeria’s, CBN, exchange rate, the $1 billion spent on kerosene subsidy translates to about N310 billion.
Osinbajo stated this at the ‘Domestic LPG Implementation Stakeholders Workshop’ in Abuja, organized by the Office of the Vice President, Ministry of Petroleum Resources and the Nigerian Liquefied Natural Gas, NLNG.
Osinbajo explained that in spite of the fact that Nigeria’s total domestic LPG grew from a low of 50,000 metric tonnes per annum (MTPA) to approximately 400,000 MTPA in 2015 due to NLNG’s intervention, Nigeria’s per capital consumption of 2.5 kilogrammes (KG), however, remains low compared to its peers in Africa.
He said, “The low level of LPG consumption in Nigeria has resulted in heavy dependence on kerosene and firewood as primary domestic cooking fuels in majority of approximately 36 million Nigerian households.
“This reliance on kerosene and firewood has substantial economic effect. Government has had to take in huge subsidies, with over $1 billion spent in 2015 on kerosene subsidy. A significantly high rate of deforestation continues to be recorded as over 95.76 million metric tonnes of firewood was used in 2015.”
According to him, the low consumption of LPG was irrespective of the superior health, environment and energy costs of LPG over other competing fuels, such as kerosene.
Furthermore, in what appears to be an irony, Osinbajo stated that most of the LPG produced in Nigeria, today, is exported, while he declared that despite the huge export and the fact that our consumption level is low, over 40 per cent of our domestic consumption in 2015 was imported.
He maintained that the huge importation of LPG for domestic consumption impacts negatively on the country’s foreign exchange outlay and also limits domestic supply of LPG.
The Vice President further disclosed that LPG has considerable benefits, which include the fact that it is more cost-effective; and provides better health benefits than firewood and kerosene, both of which has been identified has the cause of more than 50 per cent of over 93,000 deaths.
He added that the Federal Government is considering a number of interventions in the LPG industry that would among others lead to a significant reduction in the rate of deforestation and create millions of direct and indirect employment opportunities for Nigerians.