FG proposes technology devt, others as key to unlock LPG market

THE Federal Government has pointed to massive investment in technology for development of the Liquefied Petroleum Gas, LPG, market in Nigeria. Putting current utilization level in Nigeria at nine percent, it says LPG, otherwise known as cooking gas, can make serious inroad in the society with adequate technology investments through the value chain. It also canvassed for investment in support services to discourage the flooded illegal activities in the retail segment of the LPG market. While speaking on the way forward to unlock the potentials in the LPG market at the 7th Annual LPG Conference and Exhibition, held in Lagos, the Programme Manager, National LPG Expansion Implementation Plan (Office of the Vice-President), Dayo Adeshina, stated that the sector was in need of potential development in technology to unlock the gas sector of the country’s economy. He stated: “Another development needed to unlock the LPG potentials is technology which is going to play a big part in the sector going forward. “In my visit to Countries, specifically on LPG, one thing that is common from most of these developed LPG market is the establishment of gas shops in areas that you don’t have proper brand distribution channels. But that is not the case in Nigeria. In real terms can I pick up a phone and call a dealer to deliver LPG to homes. “Really, how do you pay N3.5 million as rent for house and you are still carrying cylinders. What happened to reticulation? Why can’t you pipe into that home and have a pre-paid meter? The reason why that is not happening is because we don’t have a building code on that. An estate should have a tank and then you pipe to each home and that is the way it should be. On distribution, he noted that logistics and distribution pose good opportunities for the LPG market, saying, “Why can’t we have terminals in different places where they are taking barges to go and deliver. We should look at submarines transportation in terms of opportunities for the LPG aswell.” He added that the market was in need of support services. “One should be able to send a text to suppliers and they would track the supplies. Somebody needs to start developing those telemetric in the port. You can monitor and find out when the delivery is short. “We estimated that this market is a $10 billion market and the support service is a key to developing the industry. LPG policy Adeshina, also, explained that his office was saddled with the responsibility to grow the LPG market. “There is an LPG policy which my office is meant to implement on behalf of the Federal government. The whole idea is to expand the market and take care of the various challenges faced in the LPG market. As you are aware, with the President signing 20 percent of green house gas emissions, a whole lot of deforestation and challenges faced in the country would be solved. “Also, my role is to run the expansion program that the federal government has introduced. With the expansion plan put in place, we hope the NLNG increase their supply source to the market.” Road map for LPG Moreso, Adeshina, maintained that the sector was in need of dire awareness campaign for a smoth transition from Kerosene, firewood to cooking gas His words: “In all, one thing that is lacking from the consumers, regulatory and stakeholders are the awareness on the regulatory handling, safe handling, consumer behavour, acceptability, accessibility and affordability. “If we don’t have a massive campaign, some of the issues of road side sellers of LPG will not come to the fore. It is certain that when I pay for a 50 kg cylinder, you are getting 30kg. when you get 12.5kg, you get 9kg of LPG from road side, should that be the case?. “We are trying to transit people from use of kerosene to gas. You have to change the mindset. There is big safety perception with the use of LPG tagged to be a dangerous fuel. Every fuel is dangerous, but how you handle it is important and we need to educate people on how to use those cylinders. A massive campaign is what we are looking at.” Speaking also, Head, Lubricant, OVH, Lilian Ikokwu, expressed dissatisfaction over current statistics of LPG acceptance, however, identifying opportunities to be explored from the storms. “Being at nine percent consumption of LPG in Nigeria is beyond abysmal and here in lies the opportunities. It’s a huge opportunity across the value chain of LPG. “For us to unlock the opportunities in LPG, there is need to show a high level of genuinety. We cannot speak about tax relief and ease of doing business without been able to show the end to end play of investors return from the sector. We would say storage is an issue. On developing the retail chain of the business, Lilian explained that the company has been able to develop its retail arm of the business within the last five years, calling for more attention and focus to the other aspect of the value chain of the LPG business. She, however, added that the issue confronting switching to LPG was not fear, but cost, saying, “The cost will consistently be higher with the end consumers except we fix storage and availability.”


Credits/Sources: www.vanguardngr.com