Nigeria has about 186 trillion cubic feet of gas said to be of very high grade with no sulphur, placing it as the world’s 7th largest gas reserves holder, but surprisingly she is among the lowest consumers of LPG or domestic gas in Africa. Official sources estimate that Nigeria’s reserves potential could grow to as high as 600tcf, making it the world’s 4th largest.
Conscious of this irony, the Federal Government has been trying (albeit, unsuccessfully) to force International Oil Companies (IOCs) to cooperate in the quest to make cooking gas available and affordable in Nigeria.
We recall that usage of cooking gas was first introduced in the ‘70s in the old western region. The first private LPG Company was Sungas, followed by Nido gas. The use of cooking gas was relatively popular among Nigerians in the 1980s, but they started abandoning the use of cooking gas in the 1990s when it became scarce and prices soared to as high as N10, 000 for a 12.5kg cylinder.
At the moment, industry operators say that there are only about 500,000 cylinders in a country of about 150million people. Worst still, the cylinders are old, dilapidated and therefore dangerous. Ghana, with a population of about 20 million people and Benin Republic with less than a 5 million population have about one million gas cylinders each. South Africa with a population of 40 million people has 12.5 million cylinders.
Available data confirmed that not more than one million out of the 150 million people in Nigeria have access to LPG.
Nigeria LNG, reputed as the world’s fastest growing LNG plant has already devoted 150,000 MT per annum of LPG to the domestic market since 2007, but the market is hardly able to absorb up to 50,000 MT per annum.
We are aware of the huge investments by the private sector in LPG business. Majority of these investments are in the areas such as: cylinder supply, haulage services and trucking, but, a lot more still need to be done in the areas of public awareness on the benefits of gas; both to the economy and the environment. This is more germane because gas is a cleaner and safer form of energy which is suitable for power, domestic, industrial and automobile uses and also promotes the Kyoto Protocol on green gas reduction, of which Nigeria is a signatory.
Top among stakeholders that have consistently expressed concern over the low usage of gas especially for domestic purposes is the Nigerian Liquefied Petroleum Gas Association.
According to the association, if the various bottlenecks are removed and all the tariffs and duties and other forms of taxes are reduced, consumption can indeed increase to about 2million tons per annum within the next four years. As it is the only component of LPG for domestic use is cylinder which is imported.
We recall that last year, African Petroleum Plc embarked on mass importation of transparent gas cylinders for accelerated nationwide marketing of cooking gas to Nigerians. We also recall that last year as well, the immediate past Minister of State for Petroleum, Mr. Odein Ajumogobia commissioned an LPG cylinder manufacturing plant in Ogun state. At that occasion, the minister was reported to have reiterated federal government’s resolve to get Nigerians to abandon the use of fire wood and kerosene for cooking and have them adopt cooking gas.
At the stakeholders’ summit on LPG which was hosted last year, one of the main observations was that one of the main factors hindering the utilization of LPG gas is the lack and high cost of cylinders. In order to address the issues of affordability and availability, the summit had proposed that Government should appropriate funds through relevant Government Agencies to make cylinders of different sizes for distribution free to encourage more use of LPG. This model was said to have been implemented successfully in Indonesia where the Government provided 40 million cylinders free to its populace to encourage wider usage of LPG.
The obvious fact which LPG association has also hammered on is that supply is no longer an issue; rather the major problem is the high poverty rate in Nigeria. According to the association, to start using gas for domestic purpose, a Nigerian will need a minimum of about N30, 000 for cylinder, hose, regulator and burner. We dare say that apart from the financial implication, an LPG gas user needs ‘conducive’ residential apartment.
This is certainly not common to come by in Nigeria where majority still live below the poverty line, where unemployment rate is high and where an average family of six live in a one room apartment.
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