Nigeria’s LPG Penetration Programme Threatened as Supply Declines by 21.9mmt in August

The supply of Liquefied Petroleum Gas (LPG) decreased by over 21.9 metric tonnes on the back of increasing disparity between the value of the naira and the dollar as well as the 7.5 per cent Value Added Tax (VAT) recently imposed by the federal government, THISDAY has learnt.

The development is a clear threat to the avowed pledge by the government to ensure domestic penetration of LPG or cooking gas, as demand continues to outstrip supply amid rising prices.
Last month, the federal government began the implementation of the 7.5 per cent tax on imported cooking gas, with the cost of the commodity leaping by about 100 per cent in the last few months.

The price of a 12.5kg of cooking gas which was hitherto about N3, 500 in December 2020, as of September, now sells for about N7, 000 in parts of the country, putting the much talked about effort by the government to ensure Nigerians adopt gas as the first choice of cooking fuel in jeopardy.

When asked recently as to what the government was doing about the skyrocketing prices, Minister of State, Petroleum Resources, Chief Timipre Sylva, noted that the pricing of gas was no longer under the purview of government since it has been fully deregulated.

“We are not in position to determine gas pricing because gas is not a regulated product. But, of course, we are also very concerned that prices are rising and so I am actually doing something about it in the interest of the ordinary Nigerian.
“I am calling some of the suppliers to discuss the reason for this hike,” Sylva said.

Before now, successive governments had roadmaps towards ensuring that Nigerians jettison fuels with higher carbon emissions like firewood, which is estimated to kill over 600,000 Africans yearly.
A THISDAY analysis of data on the status of supplied LPG in Nigeria released by the Petroleum Products Pricing Regulatory Agency (PPPRA) yesterday, had indicated that a total of 85,264.803mt of the commodity was supplied nationwide in August, 2021.

A breakdown of the supply report for the month signed by the Executive Secretary, PPPRA, Mr. Abdulkadir Saidu, indicated that 38,040.457mt was sourced locally by eight companies, while a number of private concerns also imported the product.
The companies which sourced LPG locally were: Ever Oil, Stockgap, NIPCO, 11 plc, Greenville Natural Gas, PNG Gas Ltd, NPDC and Ashtavinayak Hydrocarbon Ltd, while 47,224.346mt were imported by NIPCO, Matrix, Algasco, Techno Oil, Prudent, A.A Rano, Stockgap.

Additional analysis of the data on importation in the month of August, showed that 21,606.301mt was imported from the USA, while 13,044.266mt was imported from Algeria and 12,573.779mt was brought into the country from Equatorial Guinea.
“The volume of LPG supplied in August suggests a decrease of about 21,959.781 MT compared to the 107,224.584 MT supplied in the month of July. In addition, 102,787.234mt was also supplied in the month of June.

“On the other hand, out of the 38,040.457MT sourced locally, 7,042.058 MT was sourced by Ever oil, 9,429.761 MT by Stockgap, 7,687.112 MT by NIPCO, 4,761.626 MT by 11 plc and 440.380 MT by Greenville Rumuji, River State.
“Also, PNG Gas Ltd in Ebedei, Delta State supplied 651.490 MT into the market, while NPDC, Oredo, Benin State provided 1,055.310 MT and Ashtavinayak Hydrocarbon Ltd Kwale, Delta State, discharged 6,972.720MT,” the PPPRA report stated.
Similarly, the agency noted that 11,262.04MT of propane was sourced locally and supplied into the energy market by the Nigerian Petroleum Development Company (NPDC) and Ashtavinayak Hydrocarbon.

In spite of the decrease, the agency stressed that since the declaration of the “Decade of Gas”, by President Muhammadu Buhari and Sylva, the nation had witnessed a significant increase in the volume of LPG produced locally.
“This is due to the commitment of the federal government in promoting gas penetration, to ensure a clean source of energy for cooking, power generation and transportation.

“The Petroleum Industry Act (PIA) as the first law that recognises the oil and gas midstream sector will promote and protect gas-based investments and optimise the nation’s enormous gas potential while ensuring that Nigeria transits to become a net-zero emission nation,” it added.

Source: This Day

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