Expert proffers solution to meet Nigeria’s 3m tpa LPG market demand

Any plan by the federal government to meet the Liquefied Petroleum Gas (LPG) market demand of 3 million tonnes per annum would not achieve the desired result unless they address issues around Accessibility, Affordability, Acceptability and Availability. Industry experts have warned.

They estimate that over 700,000 mtpa of LPG will be consumed in the Nigeria LPG Market in 2017. NLNG LPG supply has increased from initial 100,000mtpa to 350,000mtpa (2017) to accommodate increased demand.

Nigeria has 192 tcf gas reserves, 9th largest in the world and NLNG produces over 2 mtpa LPG

Despite the demand growth, Nigeria’s LPG per capita consumption is one of the lowest in Sub-Saharan Africa. As Nigeria’s180 million populace consumes less LPG/person compared to Cape Verde with 600,000 people.

Francis Anatogu, Consulting Leader, Energy & Resources, Manufacturing Deloitte West Africa says there is need for the managers of the economy to effectively implement the gas policy to ensure that this LPG potential is realised.

Anatogu while discussing LPG revolution in Nigeria: recognising the opportunities in a twitter chat session monitored by BusinessDay disclosed that the huge potential for growth of LPG in Nigeria would only be realised if the per capita consumption is increased.

“If the market grows at the same rate as the past 5 years, LPG consumption could be over 2mMtpa by 2022. Assuming all urban households, based on urban: rural ratio of 50:50, used 12.5kg LPG monthly; at 3mtpa of LPG, market value is over $3 billion at N5,000/12.5kg cylinder compared to 2016’s $507 mn”. He said.

He further observed that in the cooking energy mix in Nigeria, firewood account for 60 percent; 30 percent for kerosene, 5 percent for charcoal and 5 percent for LPG.

The energy expert also disclosed that given Nigeria’s power situation, enormous opportunities exist for propane in power generation adding that LPG/propane can drive economic growth by reducing operating costs and boosting productivity.

He therefore called for Investment in LPG as a step in the right path supported by global trends such as the Paris Climate Agreement.

KELECHI EWUZIE