05 December 2016, Sweetcrude, Abuja — Nigerian Liquefied Natural Gas, NLNG, is targeting a 32 percent annual growth rates in Liquefied Petroleum Gas, LPG, consumption, from 400,000 metric tonnes per annum (mtpa) to over three million mtpa over the next five years.
This, according to the Managing Director of the Nigeria LNG, Mr. Tony Attah, would be achieved with an aggressive and well-coordinated market expansion strategy.
He further stated that this would bring about a potential increase in per capita consumption from approximately two kilogrammes (kg) to over 12kg; well above the sub-Saharan average of 3.5kg per capita.
He stated that the increase in LPG adoption that would arise could result in a number of economic benefits, among which are that it would bring about a reduction in kerosene consumption and Federal Government subsidies, leading to foreign exchange savings from reduced importation.
He further stated that it would lead to the generation of over 50,000 direct employment opportunities across the LPG value chain with the attendant multiplier effect on the economy and also bring about a reduction in the rate of deforestation in the country by over one per cent from 3.7 per cent to 2.5 per cent, thus helping to further the fight against desertification.
In addition, Attah disclosed that increased LPG consumption would engender a reduction in reported number of deaths attributed to indoor air pollution, especially among women and children.
“Data shows that over 90,000 women die as a result of indoor air pollution and smoke. At NLNG we believe nobody deserves to die simply because they want to put food on the table for the families; this has got to be reversed and LPG offers the platform to save lives,” he stated.
He noted that the growth of supply and demand of LPG from less than 50,000 mtpa per annum in 2007 to about 400,000 mtpa in 2016 brought about new sets of challenges.
According to him, there are still other bottlenecks beyond its control which frustrates the full-fledged development of the market including the dearth of investments in LPG reception facilities and supply infrastructure.
Others, Attah said, are throughput challenges, as well as an onerous fiscal regime and regulatory environment, such as the imposition of value Added Tax, VAT, LPG produced in the country while the volumes imported are granted VAT waivers.
However, he said, “Unlocking the potentials of the industry will require public/private sector partnership. The government needs to intervene by removing fiscal and regulatory bottlenecks necessary for the creation of a conducive business environment for private sector investment in all segments of the value chain.
“The removal of VAT on LPG as well as taxes and duties concessions for LPG equipment and cylinders must be at the top of the priority list for the government.”
He emphasised the need for the private sector to deepen the market to create efficiency and provide quality services at lower costs while ensuring that the highest safety standards are adhered to across the entire value chain especially in LPG plant operations, transportation and cylinder quality/recertification.