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Tag: NLPGA

  • NLPGA, investors discuss $10b policy lifeline

    NLPGA, investors discuss $10b policy lifeline

    The Nigerian Liquefied Petroleum Gas Association (NLPGA), investors and stakeholders in the liquefied petroleum gas (LPG) industry have discussed on how to tap into the over $10billion investment opportunities that would be unlocked by the national LPG policy unveiled by the Federal Government.

    The discussion took place at the NLPGA’s annual Chief Executive Officer’s Breakfast Meeting held in Lagos. The meeting brought together LPG producers, marketers, International Finance Corporation, UBA, Sterling Bank and other stakeholders who shared ideas on the investment opportunities that are expected to be created by the national LPG policy and how industry operators tap into them.

    NLPGA’s Executive Secretary, Mr. Joseph Eromosele, e explained that the overall goal of the LPG policy was to promote the wider use of LPG in domestic activities, power generation, autogas and industries while increasing national consumption to five million metric tonnes in five years.

    According to him, over $10billion can be generated if 50 per cent of the current kerosene and firewood users in the country switch to cooking gas by 2019. This, he added, offered huge investment opportunities for LPG players.

    He said: “Only five per cent of the Nigerian population utilises LPG for cooking while 56 per cent depends on firewood and 27 per cent on kerosene. Over 30 million households and more than 100 million Nigerians depend on firewood as a source of energy for cooking but this has come with collateral damage to human health, environment through deforestation, and the economy. With the LPG policy, we will be able to drive broader penetration of LPG into homes, especially the low-income households in rural areas.

    “Over $10 billion will be generated for the economy from the switch of 50 per cent kerosene and firewood users by 2019.  Estimated 500,000 – 1,000,000 jobs will be created in the LPG value chain within the next two years with the planned Kerosene to LPG switching programme.”

    The Deputy President, NLPGA, Mr. Nuhu Yakubu, said the policy also aims to use LPG to displace low pour fuel oil (LPFO) and diesel as popular fuel among industrial users while deepening applications in agriculture and commercial establishments.

    “Yakubu said: “The policy will also promote the use of LPG for off and on grid power generation. It will provide the environment for the use of LPG in the automotive industry with a target conversion of 10 per cent of the country’s vehicle population. These are investment opportunities for industry stakeholders.”

    The Programme Manager, National LPG Expansion Implementation Plan in the Office of the Vice-President, Mr. Dayo Adeshina, lamented that 18 states in northern Nigeria are currently suffering from desertification and deforestation because several millions of the citizens rely on firewood for cooking.

    Adeshina warned that if the situation continues unchecked, states in the southern part of the country could soon start experiencing deforestation, a development he said shouldn’t be allowed.

    He noted that only increased utilisation of LPG could halt deforestation, which is fast encroaching into new areas of the country. Adeshina added that to deepen LPG usage, more investments were needed in local gas cylinder manufacturing and urged NLPGA members to begin to look at the direction especially with a national LPG policy now in place.

    He decried the shutdown of two cylinder manufacturing plants in Nigeria, adding that some investors had signified interest in manufacturing cylinders in the country.

    Participants at the meeting noted that though the nation’s total domestic LPG consumption had grown from just below 70,000 tonnes in 2007 to 500,000 tonnes in 2016, the improvement in the domestic consumption of LPG only translated to a per capita consumption of only less than 2.5kg. This was compared to the low per capita consumption in selected African countries like South Africa at 7.28kg, Ghana at 9.45kg, and Morocco at 66.27kg, they added.

    According to the participants, some factors responsible for the low consumption level in Nigeria inadequate supply of LPG equipment, high cost associated with the acquisition of cylinders and LPG stoves, insufficient number of jetties and LPG inland storage facilities, excessive import duties and VAT on LPG equipment, and inadequate road and transport network facilities. They also noted lack of access to long-term funds for LPG project in the country and blamed the banks for that.

    Representatives of some of the banks at the meeting enlightened the LPG operators on what they needed to do to attract funding from the banks.

    The meeting ended with the confidence that the LPG policy would spur a revolution in the LPG industry and urged the government to ensure that the policy is fully implemented to the benefit of all Nigerians.

  • Body warns against flouting SON’s policy on cylinders

    THE Nigerian Liquiefied Petroleum Gas Association (NLPGA) has warned its over 200 members against flouting the policy of the Standards Organisation of Nigeria’s (SON) on gas cylinders. Such offenders are to be prosecuted.

    Its President, Dayo Adesina, told The Nation that the Department of Petroleum Resources (DPR) would prosecute any marketer who frustrates SON’s policy of removing obsolete cooking gas cylinders from the market and replacing them with new ones in the next six months.

    He said his members were aware of the powers of the DPR to prosecute defaulters, adding that the development became necessary to ensure compliance when the policy takes effect in June.

    Adesina said: “The roles of the two regulatory bodies – the DPR and SON- are crucial on this issue. DPR is vested with the powers to regulate operators in the oil and gas industry. Its duty is to ensure that operators comply with policies formulated for the growth of the sector. By this, DPR has the powers to prosecute operators that refuse to comply with the new policy on cooking gas cylinders.

    “Our members would also monitor users of cylinders to ensure compliance to the policy. They know much about cylinders and are in a position to hold consumers who use defective cylinders responsible.

    ‘’You cannot be our members and at the same time, be involved in unsafe practices. We have a code of conduct that guides our operations. If there is any breach, DPR and SON have the rights to sanction erring aoperators to encourage the growth of the sub-sector.’’

    He explained that his members know the intricacies of the LPG market, compositions and quality of cooking gas cylinders, and are, therefore, in a position to differentiate between the old and the new; sub-standard and quality cooking gas cylinders.

    The body, Adesina said, has regulations, which members must comply with, or face sanctions. He said the association was working on modalities for the implementation of the policy.

    “The document on cooking gas cylinders is in exhaustive. SON is yet to tell the public the direction it is taking on the issue. The scheme is long-term; the issue of retracting the old cylinders would take some time. At the moment, consumers own cylinders, coupled with the fact that there is no control over the use. Though SON regulates the cylinders coming to Nigeria, there is no control over the product.’’

    He said a paradigm shift from the individual to institutional ownership of cooking gas cylinders would take place as a result of the policy. The idea, he said, would change the LPG’s market structure because marketers would own LPG cylinders, and not the consumers.

    Efforts to get the DPR to comment on the issue proved abortive as calls made to the agency was not returned.

    SON had planned to come out with guidelines on the quality of LPGs. The aim is to regulate cooking gas coming to Nigeria, and ensure that consumers use the right product.

  • How to improve electricity supply, by NLPGA

    How to improve electricity supply, by NLPGA

    Nigeria needs about 2.5billion cubic feet per day of gas (bcf/d) to improve electricity generation, the Nigeria Liquefied Petroleum Gas Association (NLPGA) has said.

    According to a report titled: “Importance of Liquefied Petroleum Gas to Economic Development,” the group said the nation will achieve sufficient power supply if gas is made available to the power stations.

    The Nigerian National Petroleum Corporation (NNPC), earlier in a report, said the country required over 2.5 bcf/d, to triple power generation from 4,000 megawatts (Mw) to 12,000 Mw.

    The report said the development became necessary because natural gas had been designated the preferred fuel for power in the country.

    It said the country was being positioned as the hub of gas-based industries such as fertilisers, petrochemicals and methanol. It added that gas-based industries will be leveraged to catalyse numerous downstream manufacturing industries that will also be anchored on natural gas as fuel.

    The strategic objective of natural gas, the report noted, is to stimulate economic growth and employment opportunities for Nigeria’s 160million population leveraging its abundant gas reserves.

    The President, International Association of Energy Economics (IAEA), Prof Adeola Akinnisiju said 80 per cent of the power plants in the country are gas-based, while the others are hydro.

    He said it is imperative that the country’s power sector access enough gas for the turbines to increase energy production.

    He said the inability to fire the turbines with enough gas would pose threat to the realisation of the reform agenda that is anchored on improvement in power supply through a private sector driven initiative.

    He said the energy potentials is high in the country, adding that there would be a spill-over effect of improved electricity supply on other sectors of the economy.

    He said: “There is need to fire the turbines with sufficient gas for growth. The daily requirements of turbines are high, coupled with the fact that their operations are diverse and multi-faceted.

    “Since the sector depends on gas-powered plants, compromising the gas usage of the plants would not augur well for the country. Abundant opportunities exist in oil and gas industries and they can only be harnessed to grow the country though concerted efforts of the stakeholders.”

    He said the country boasts of 187trillion gas reserves, adding that the reserves could help in bringing huge export earnings like oil.

  • SON to enforce LPG cylinders requalification

    Hard times await importers and marketers of substandard and old Liquefied Petroleum Gas (LPG) cylinders as the Standards Organisation of Nigeria (SON) and other stakeholders are set to enforce the implementation of requalification programmes for LPG cylinders to enhance safety for the users.

    The regulatory agency dropped the hint at the Second Nigeria Liquefied Petroleum Gas Association (NLPGA) Conference in Lagos entitled: “The Cylinder: A vital tool for LPG growth in Nigeria.”

    Head, Metrology Department of the agency, Obiorah Manafa, who spoke on the enforcement and protection of the LPG sector with emphasis on cylinders, revealed that plans are afoot to constitute a technical committee comprising members from all sectors to develop a framework for the workability of the requalification scheme.

    He noted that the situation in the country where cylinders are either imported or produced locally and sold to users without any programme for their maintenance and requalification by marketers is not healthy for the industry and the country.

    He said the absence of such programme had caused more substandard and old cylinders of 15 years and above to be in circulation in the country, a development responsible for the safety issues that LPG has had to contend with over the years.

    Citing the cases of China and India where requalification is working, he said it would be advisable for Nigeria to adopt the China’s model where cylinders are owned by individuals unlike India were cylinders are owned by marketers.

    He, however, tasked stakeholders including plant owners, marketers and retailers to cooperate for the programme to succeed in Nigeria.

    He listed some of the benefits of requalification of cylinders to include enhancing safety of lives and properties in the industry, creating more confidence in the minds of the users, boosting the LPG business and providing more business for indigenous cylinder manufacturers as well as eliminating most of the sub-standard and old cylinders from circulation.

    President, Alhaji Auwalu Ilu, said the focus of this year’s conference on cylinders was apt because Nigeria uses LPG mostly for domestic purpose.

    He said until recently, most cylinders were unbranded and owned by the consumers hence bestowing upon them the responsibility of ensuring that the cylinders are fit and safe for use.

    He added that because consumers lack idea on the maintenance and requalification of cylinders, they see nothing wrong in purchasing second hand cylinders.

    He noted that the association is about to review the LPG standard with SON as a result of the safety challenges that were observed with the imported LPG from Niger Republic.

    Speaking on opportunities, which Nigeria stands to realise by switching to LPG, Yomi Awobokun, Managing Director, Oando Marketing said a large portion of the $1.1b investment required is to be gained in exports of the gas and its cylinder.