PPRA to Partner NLNG in Addressing LPG Shipping challenges

The Petroleum Products Pricing Regulatory Agency (PPRA) has said it will join forces with the Nigeria Liquefied Natural Gas (NLNG) to address the shipping challenges facing the movement of Liquefied Petroleum Gas (cooking gas) from Bonny in Port Harcourt to reception facilities.

In a communiqué issued after a meeting of LPG stakeholders stated that the PPPRA was directed to engage the NLNG in resolving the challenges hindering

According to the communiqué “Currently, only NLNG or NLNG-nominated vessels are allowed to move the LPG from Bonny to the domestic market,” it said.

The PPPRA said the meeting was convened to deliberate on commercial and regulatory issues in the sector with a view to addressing existing challenges and ensuring the focus of all stakeholders on the actualisation of government’s vision for the sector.

The meeting recommended a review of the N360 per dollar exchange rate utilised by the main domestic LPG supplier, NLNG, for transactions as compared to the official rate of N306.5 per dollar.

It said the review would help to bring down the cost of locally sourced LPG, “which presently attracts higher cost than imports.”

“This is based on the premise that NLNG pricing transactions are conducted based on official naira to dollar exchange rate. This measure, if adopted, will have a significant and immediate impact on the end-user product price and enhance affordability,” the communiqué said.

The meeting also recommended the formulation and implementation of a starter pack (cylinders, burners and regulators) injection programme as a major demand stimulant to address the challenges of affordability and penetration by millions of potential users.

The meeting said a comprehensive nationwide LPG awareness and sensitisation campaign to be funded and coordinated by stakeholders was required to stimulate demand in the market.

“To this end, a technical working committee that would develop the framework and modalities was constituted,” the communiqué said.

The meeting noted that the Department of Petroleum Resources had banned the LPG add-on facilities in retail outlets and stand-alone skid tanks.

It said, “The initial enforcement action in the form of a blanket ban by the DPR which was triggered by the scales of abuse is currently being reviewed and compliance with safety requirements will form the basis for operation of such facilities going forward.

“The meeting emphasised that these faciities are key to the LPG penetration and as such must be allowed to thrive in a safe and secure environment under strict regulatory supervision.”

The communiqué said in view of the importance of affordability and volume to deepening domestic LPG penetration, stakeholders resolved that the PPPRA should undertake regulatory interventions that might drive down the price of the product.