How far has your association gone with the proposed National Cylinder Scheme?
How far has your association gone with the proposed National Cylinder Scheme?
We have not reached the implementation stage, but individually, all our members are having their own programmes, I am sure you can see what Oando is doing, they brought in 500,000 cylinders of the 3kg which was recently launched in Lagos, the Total cylinder scheme is commencing anytime this month, they are injecting about 18,000 cylinders, they must have received it by now, and anytime this month they will do their own launching, Gas Terminalling has also received quite a number of cylinders, most of our members as individual companies have their own programmes, likewise we in Ultimate Gas, we are expecting our set of six containers of various sizes of cylinders by the end of next month, so between now and end of the year, we are expecting to receive a million cylinders, already, Oando has done about 500cyinders, so if you put everything together we will be able to achieve another 500cylinders. Also, we just received a letter confirming our appointment with the Lagos State Commissioner for Energy on how we can collaborate together so that Lagos State will champion the use of LPG and de-emphasize the use of kerosene and firewood which is commonly known as charcoal and converting to LPG. Also, the Federal Government, through the NNPC is also looking at their own National Cylinder Scheme. So I can tell you that a lot is happening even though not at the rate at which we wanted it, but it is a positive development.
What are the recent moves you are making to create awareness about the benefits of LPG usage?
We are doing a lot about this, look at what Oando is doing, also, our other companies recently are also trying to educate the people, we have a lot of road shows, particularly in Lagos and other areas, NIPCO has done a similar thing, in fact they have got ladies to go round to the market to show to them, but unfortunately publicity is very expensive, especially in national campaign like this one, it costs hundreds of millions of dollars, and you know the industry is not big enough, and those of us in the industry are not doing too good for us to go in such magnitude, but we are encouraging the people and to be honest with you the market is improving, the consumption is also improving, so I believe that we are making some progress.
How friendly is the duty payable on the importation of LPG?
For quite some time now, there has not been any importation of LPG since the Nigerian LNG scheme started, together with the NNPC domestic scheme, there is no duty on any imported LPG and there is no VAT on it, so it’s like zero duty and zero VAT on imported LPG, once in a while the people get a cheaper cargo.
Has the number of LPG consumers increased in Nigeria?
We are still the lowest in terms of per capital consumption, if you look at our population, over 160million people consuming only about 130 tons per annum, our per capital consumption is lower than that of Niger Republic, Benin Republic as well as Ghana, Ghana that does not even have LPG at all, so we still have a lot of room for growth and expansion, but I am confident that it will happen, it is how soon that I cannot tell.
What is the relationship like between your organization and the federal government and the regulatory agencies?
We have a collaborative effort with all of them, the NNPC is a member of the association, it’s also a member of the council of the association, SON is equally a member of the council of the association, so we are all working together, it is an industry association comprising of everybody including producers, terminal operators, transporters, retailers, marketers and so on, NLNG is also a member of the governing council, so we are all working together to see how we can deepen the LPG market, individually we see it differently, it is when we go back to our various organizations that we all think this same thing which is how to promote the use of LPG, and fortunately for us it is a product that we have in the country and it is a product that we have in abundance.
Is it true that SON usually imposes duties on your members who try to import cylinders from abroad?
It is true, SON will argue with you that they are not being properly funded, they are now going commercial and so they need to charge fees for some of the statutory responsibilities that they carry. We will feel strongly as an operator, but SON will talk as a regulator that some of the fees have increased, a lot of them have multiplied, but we are engaging them and talking to them, there is sharp difference between the position of SON which is also a member of the council and those who are in the business of bringing in cylinders, SON is saying that for them to do their duty we have to pay for it, but we are saying no to this, so we are trying to see how we can marry the two together, while we are not denying them the right to perform their functions, still, it is not going to be like on a commercial basis because if you do this you are compromising your position, and the more expensive you make it for me to import, that makes the end product more expensive and this means that less people will have access to it and this has always been our argument.
What is the present price range of cooking gas in the market?
On the average, the price in Lagos is about N2,700, this is reasonable because we also buy it based on international price, so if the crude oil goes up, the price of all other petroleum products goes up including LPG, if the crude oil price comes down you pay the price, so Nigerians are paying the price with somebody in the US or in the UK, it is based on the same market principle, there is no subsidy on LPG; you pay the correct price of it, unlike kerosene and petrol that is being subsidized by the government, from what we have seen, the landing cost of petrol is about N160 per litre and government is selling it at 97, the same thing with kerosene which is N180 per litre but it is being sold for N50, so government is giving the difference, whereas LGP and diesel are based on international price, no matter the price in the market this is what you will pay and this is why it fluctuates, today it can be N170 or N140 tomorrow. Nigerians are even paying more because our logistics here is bad, we don’t have the same infrastructures.
Are there any incentives of any kind from the government to LPG operators?
For now there is nothing, but we are trying to see if there could be any, sometimes when you are talking with the government they don’t like seeing it in the papers, but I believe we are working together and we will find a way to promote the LPG market, for the last one year now everybody is talking LPG, the president, the honorable minister and the top managements of the NNPC, this has never happened before, and the industry too is very active, so anytime from now there will be a big bang that will quick- start the revolution in the LPG market.
What do you intend to achieve with these imported 1million cylinders?
The more cylinders you have, the more consumption it means, because you cannot move the product at the domestic level without the cylinders, cylinders will no longer be an issue and we will start to encourage people to withdraw the old cylinders for additional safety and they should utilize the new ones because most of these cylinders have been there in the market for a long time.
How about the pricing of the cylinders?
It is based on commercial price, by the time you put all the cost you paid together plus your margin, you are not a charity organization, so you will have to pass the price to the consumer.
What will you suggest as a way out of the incessant petroleum tanker fire accidents on our expressway?
To be honest with you, there are so many faults, first is the state of the roads, 90% of the accidents are as a result of bad roads, and 10% is being caused by the drivers because they are the ones in charge at that particular moment, these are the major problems, some of the accidents happen as a result of trying to avoid the pot holes and this usually results into an accident. Also there is no much enforcement of most of the road regulations, nobody is bordered whether a truck is in shape with good tires, trafficators, whether they are over-speeding or not, everybody is on his own, you can load 60tonnees or 80tonnees and nobody will verify, from Lagos to Kano, if you take even 200tonnees nobody will know, some of the trucks are not road worthy and this leads to frequent breakdowns on the road, some as a result of fake spare parts, adulterated diesel and so on, but one of the major cause is the condition of the roads, because if the roads are good, you don’t need too much over-taking, too much maneuvering , sudden brakes and interruptions, if the road is good it becomes easier to move but when the road is bad it creates a lot of traffic congestion and maneuvers, if there is a pot hole, even on a normal city road, the moment you approach it you have to slow down, by doing this some people will want to go sideways and in the process they lose balance, if the roads are good you have solved most of the problems, the remaining percent are human problems which is the driver and the people selling the fuel, fake spare parts and tires and so on. For those of us that truck from here to other parts of the country, by the time your truck travels ones, you will have to change about five or six springs because the port holes are too many and some of them are brand new ones, there are some that over time the drivers have become used to it and by the time they approach it they must have slowed down.
How can the drivers be checkmated?
It is the attitude of Nigerians, a lot of these drivers do not have valid driving licenses, secondly, nobody gets sanctions, if there is an accident, most of the sanctions are put on the company and not on the drivers, the driver will run away and go and look for employment somewhere else without any data, a driver that was sacked by company ‘A’ will be employed by company ‘B’, As a truck owner, I will not allow my driver to pack on the bridge, but the authorities here (like LASTMA); the moment they arrest a truck all they are after is the fine, the driver will not be disciplined, if they could send the driver to one month imprisonment, because he is the one parking, as a company I will sack the driver and he will go and get employment elsewhere. I think the drivers too need to be punished.
Don’t you think some of them need to be educated and orientated on the traffic regulations?
It is unfortunate, it is always the motor boy that becomes a driver, it depends on how you learn the trade, either for 20 or30 years, it is like apprenticeship, like one learning automobile repair, our driving industry has evolved over a period of time, hardly will people go and learn driving elsewhere, apply for a job and drive a truck, these days you must be a motor boy somewhere, after this you start changing tires and so on, start learning how to drive until you graduate into a driver, so all these bad habits they have leant over a period of time, a lot of companies usually treat safety issues and other awareness, but it’s a pity that the drivers don’t respond to all these kinds of things, and the moment they leave your yard you are no longer in charge, it is not only the driving but the sharp practices also, most of the adulterations are done by drivers and not even by the owners of the companies, stealing of products and so many other vices, including removing of genuine parts and replacing it with fake ones. One of my drivers had to go to jail because unfortunately for him, somebody that knows me has stopped over to change his tire, but my driver was removing my tires and selling it to the guy by the road side; they were both arrested and taken to court after investigation was carried out. No matter what you do, they will never stop because that is how they learnt the trade.
Some stevedoring companies have been accused by NIMASA of flouting government regulations, what is your reaction?
I am not aware of it and I think it is wrong of NIMASA to make a general statement, sometimes people just do it the easy way, they need to let us know who these companies are, they should not just generalize statements, NIMASA is the regulator that license the stevedoring companies, if they are not meeting up they have the responsibility to sanction them, but it is not easy to just generalize and categorize everybody in the same group, I am not aware of what they said and I am not aware of what they are making reference to, there might be companies like that but they need to let us know them and which area they are not measuring up. I can speak only for myself, we are one of the most organized and well equipped, and we are up to date in everything that is required of us, if you are not registered with NIMASA, you are not even a stevedoring contractor and you are not recognized, you must have the license before you can operate.
How will you access the performance of the maritime sector in the first half of the year?
I think I must commend the efforts of the coordinating minister, the minister of transport, the managing director of NPA and all the other stakeholders for making this 24-hour delivery a reality, even though a lot of people are still not coming forward to take delivery, but maybe over time, they will. Also, the traffic situation for the last one month has been reasonably good and I think they are taking measures to ensure that it never comes back again, if they continue with this commendable effort it is okay. The reduction of agents in the port has also helped a lot and delivery has also improved, most of the terminal operators have invested a lot of money in equipment and I think the traffic situation and this 24- hour clearing that government has achieved is for their business, so I must commend them especially the minister of finance.
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