FG Targets 5m Metric Tonnes LPG Utilisation In 10 Years

Vice President, Yemi Osinbajo on Friday disclosed that the administration is targeting five million Metric Tonnes (5,000,000 MT) of domestic, commercial and industrial LPG utilisation in the next 10 years.

Osinbajo made the disclosure while commissioning the biggest Liquefied Petroleum Gas (LPG) cylinder manufacturing plant in Nigeria.

The plant built by Techno Oil is located in Ibeju Lekki, Lagos and have the capacity to produce one million cylinders in four months and three million cylinders annually for the country.

Osinbajo, in his speech during the commissioning, said: “The goal is to achieve Five Million Metric Tonnes (5,000,000 MT) of domestic, commercial and industrial LPG utilisation in 10 years.

“Specifically, for household cooking, we are targeting a 40 per cent adoption rate to 13.8m households in five years, and 73 per cent adoption in 10 years to 33.3m households.

“We believe that the sub-sector can create up to 2 million new direct and indirect jobs in Nigeria.

“We have also demonstrated our commitment by establishing an Inter-Ministerial Committee and a multi-stakeholder national coordinating body, the National LPG Expansion Programme.

“Techno Oil’s investment auspiciously converges with our administration’s efforts to speedily diversify our economy, especially through domestic and indigenous solutions.

“A nine per cent penetration rate nationwide, despite Nigeria’s domestic LPG production of 3 million metric tonnes (MT) per annum. For far too long our dominant fuel options have remained biomass fuels (firewood) or traditional fuels (petrol and diesel).

FG Targets 5m Metric Tonnes LPG Utilisation In 10 Years

“As you are all aware, these dominant fuel choices present significant health, environmental, economic and social challenges, ranging from increased carbon emissions; massive levels of deforestation, worsening the problem of desertification; and a high number of deaths resulting from indoor air pollution.

“Natural Gas and its derivatives such as Liquefied Petroleum Gas (LPG) are on the other hand not only cleaner and more friendly to the environment, they also present substantial economic and investment opportunities across the Nigerian economy.

“Our determination to prioritise the LPG sector development culminated in the Federal Executive Council’s approval of the National Gas policy in 2017, with dedicated input for the enhancement of the LPG sub-sector.

“Our driving vision has been to transform the sub-sector from a commodity sector based on export, to a value creation sector based on domestic utilisation and industrialisation.

“We correctly identified that it was necessary to emphasize coordination and collaboration, as previous attempts in enhancing LPG utilisation failed because of a fragmented approach within the Federal Government.

“Since the implementation of the coordination reforms – including the creation of a dedicated Project Management Office – great progress has been recorded, including the removal of five per cent VAT from the domestic pricing of LPG, as a first step in giving domestic output an advantage against imported products.

“Development of a Marketer Cylinder Owned Model instead of the current Consumer Cylinder Owned Model. This will eliminate the consumers’ up-front purchase of LPG cylinders which in some cases are substandard, replacing it with a cylinder exchange, whereby the consumer only pays for the content. No household will need to purchase or own an LPG cylinder.

“The Cylinders will be delivered and retrieved by the Marketers who will also be responsible for the maintenance and refurbishment of the cylinders, making LPG accessible to a whole new segment of non-LPG users.

“Strengthening the regulatory framework for the sub-sector. Let me assure you that the Federal Government will continue to actively support every effort to promote the use of LPG in Nigeria, as well as create and maintain an effective and catalytic regulatory environment.”

On her part, the Executive Vice Chairman and Chief Executive Officer, Techno Oil Limited, Nkechi Obi, stated that the infrastructure, we bridged the infrastructure gap in the country.

She said, “This plant has an annual production capacity of over five million cylinders of different sizes. In line with the objective of LPG expansion plan by the federal government, our 12, 00 MT terminal construction has reached 90 per cent and would be commissioned by November 2019.

“The industry is heavily challenged with multiple barriers, believed to have hindered the deepening of LPG adoption in Nigeria. Prominent amongst these barriers is cylinder inadequacy and the high cost of its acquisition.

“There is a growing concern amongst stakeholders related to the saturation of the market with old, expired and substandard cylinders that have gained entry into our country through the activities of unscrupulous individuals and entities who show no regards for human lives and the Nigerian economy.

“We have just two million cylinders in circulation in Nigeria. And in just four months, this plant will produce one million cylinders.

“This means that we have the capacity to meet the country’s requirements and export to other West African countries.”

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