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Business News of Thursday, 29 September 2022


Nigeria’s LPG production hits five million tonnes

Liquefied Natural Gas Liquefied Natural Gas

The federal government says Nigeria currently produces about five million tonnes of Liquefied Petroleum Gas (LPG) annually, and only eight per cent of the production is utilised domestically, with the bulk being exported.

It says domestic LPG production stands at about 45 per cent of annual consumption, with Nigerian Liquefied Natural Gas Limited (NLNG) supplying 450,000 metric tonnes per annum while 55 per cent is imported.

Adeyemi Dipeolu, Special Adviser to the President on Economic Matters in the Office of the Vice President, disclosed this Wednesday at the India-Nigeria Liquefied Petroleum Gas (LPG) Summit Abuja, 2022.

The Nigerian National Petroleum Company Limited (NNPC Ltd) hosted the India-Nigeria LPG summit with the support of the Office of the Vice President and the World LPG Association (WLPGA).

In a keynote address, Mr Dipeolu said Nigeria had the ninth largest proven natural gas reserves in the world and the second largest LPG producer in Africa after Algeria.

“LPG adoption in the Nigerian market, of course, is still very low, with per capita consumption at about 1.8 kg, which is below the West African average.

“The household energy mix in Nigeria is about five per cent LPG, 65 per cent biomass and 30 per cent kerosene,” he said.

Mr Dipeolu attributed the preference for other sources to the high cost of cylinders and lack of awareness of gas.

“There is also the high cost of LPG in comparison with alternative fuels, insufficient and inappropriate cylinders in circulation and inadequate infrastructure, especially trucks, roads, rail pipelines and plants,” he added.

He said the predominant use of biomass for household cooking resulted in deforestation and ambient air pollution, which could lead to death due to stroke, heart disease, lung cancer and chronic respiratory diseases.

The presidential aide underscored the imperative for policies, incentives and investment to grow the Nigerian LPG market.

He said this would make cleaner fuel available, accessible and affordable, not only for household cooking but also in autogas, captive power generation, heating and cooling, agriculture and industry.

He expressed optimism that Nigeria would learn from India’s experience with the Pradhan Mantri Ujjwala Yojana (PMUY) scheme implemented by the Indian government in May 2016 such that LPG penetration in that country has increased from 62 per cent to 100 per cent currently.

According to him, the recently enacted PIA provides enablers for robust midstream and downstream gas development by promoting policies, incentives and waivers to stimulate investments.

He said others included removal of VAT on domestic LPG, presidential waiver on duty imported LPG equipment, tax holiday on new investment on gas and approval of eight new LPG terminals and storage facilities to add 150,000 metric tonnes of gas capacity.


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