NNPC wavers on LPG commitment as Nigerians call for more action


October 17, 2017 | 3:33 pm
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Four months after Maikanti Baru, group managing director of the Nigerian National Petroleum Corporation (NNPC), said the corporation was interested in working with Indonesia on its initiative to replace firewood and kerosene with Liquefied Petroleum Gas (LPG), as primary domestic fuel for cooking, little has been heard of the plan but Nigerians are calling for action.


Through social media feeds monitored yesterday, many Nigerians took to their Twitter pages calling for an upgrade to gas, indicating a greater awareness for the role of natural gas in protecting the environment and saving costs for millions of households who depend on wood and kerosene for domestic cooking.


Using the hashtag #upgradetogas, many Twitter users were asking about LPG gas plants and availability of gas cylinders refill. Africare, an independent, private-sector charity is promoting the advocacy call through social media.


BusinessDay asked Ndu Ughamadu, NNPC’s spokesman for update on the planned arrangement with Indonesia but did not get a response.


However, the corporation’s July monthly operations and financial report, indicates that out of the 1,115.41 mmscfd of gas supplied to the domestic market in July, about 688.70 mmscfd, representing 61.74% was used for gas-fired power plants while the balance of 426.71 mmscfd or 38.26% was supplied to other industries, including for LPG.


Like Nigeria, Indonesians once used kerosene as the main fuel for households.  To change this situation, the government of Indonesia launched a kerosene substitution programme in 2007 to convert over 58 million users of kerosene to LPG.


Again like Nigeria, Indonesia had subsidized kerosene for decades but as population continued to rise and oil prices surged higher, the subsidy became a huge burden for the country, accounting for 57% of the state’s total petroleum product subsidy


According to a study on Kerosene to LPG Conversion Programme in Indonesia jointly written by PT Pertamina & the WLPGA, France, between 2001 and 2008, all citizens meeting the program requirements received free “Initial Package”, consisting of a 3 kg LP Gas cylinder, a first gas-fill, and a one-burner stove, hose, and regulator.


A major effort was undertaken by the government to plan an infrastructure that could be built within the first three years. Based on end-use “energy equivalent” calculations, one litre of kerosene equates to 0.39kg LP Gas, Indonesia saved $2.17 billion by 2006.


The researchers said Indonesia’s model succeeded due to careful planning. The country set a five year plan in motion and faithfully followed the timelines and met delivery milestones.


Key organisations were given specific roles. The Ministry of Energy and Mineral Resources (MEMR), coordinated programme implementation, Pertamina (the national oil company), procured gas cylinders and supplied LPG, the ministry of Industry procured gas stoves, hoses, and regulators, the ministry of Women’s Empowerment embarked on messaging, while the ministry of Small and Medium Enterprises distributed LP Gas packages.


In less than 6 years, Pertamina has distributed initial packages to almost 54 million households and small-medium enterprises (93% of their target), cut kerosene imports by 8.2m litres and replaced it with 3.2 million metric tonnes of LPG, saving the country $6.9 billion.


In 2016, Ghana embarked on a Rural Liquefied Petroleum Gas (LPG) programme to  scale up the distribution of 60,000 free cylinders, cook stoves and related accessories to beneficiaries in low access areas. The goal was to incentivize private LPG marketing companies to set up there.


Nigeria’s LPG market has witnessed massive growth from less than 70,000 metric tonnes consumed in 2007 to about 500,000MT currently against to operators.


“There is a strong economic, environmental and security case for use of gas in Nigeria, including even for Compressed Natural Gas (CNG) cars” said Chijioke Mama, energy analyst and founder of EnergyDatar, an energy intelligence firm, in a recent comment for BusinessDay.


Operators say big policy initiatives that will encourage investments in manufacturing plants, storage facilities and jetties, and the promotion of gas-powered vehicles are required in Nigeria.

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October 17, 2017 | 3:33 pm
  |     |     |   Start Conversation

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