LPG marketers fear profit hit over low consumption of cooking gas

The Liquefied Petroleum Gas Marketers have expressed worries of likely profit knock owing to the continued poor consumption of cooking gas in Nigeria. This is as the consumption level of LPG in Nigeria currently stands at 5 percent of the annually produced 3.2 million tonnes.

According to the marketers, there is need for government to help develop LPG market in Nigeria owing to the fact that cooking gas is highly environmental friendly compared to other sources of energy for domestic use.

Speaking at one day Nigerian Association of Liquefied Petroleum Gas Marketers (NALPGAM) 2014 inaugural lecture, with the theme, ‘Cylinder and the Future of LPG in Nigeria’,   Haruru Momoh, managing director, Pipeline and Product Management Company (PPMC) said that only about 250,000 tonnes of LPG were consumed in 2013 out of a total of 3.2 million tonnes of LPG that is produced annually in Nigeria.

He said that in the energy mix in Nigeria, the consumption rate of petroleum is about 56 percent, kerosene 27 percent, charcoal 6 percent, sawdust 4 percent, electricity 2 percent while LPG takes 5 percent.

Haruru, who said that the place of LPG in the energy mix is unacceptable for a country that is producing annual volume of 3.2 million tonnes, also added that the need to adopt development schemes that will involve massive consumer education and advocacy by critical stakeholders.

“We are doing a free cylinder scheme to a segment of the society and we are working with the financial institutions in Nigeria to institute interest free loans for the acquisition of cylinder. LPG is the alternative source of energy because it is accessible, convenient, environmentally friendly and cheap these are reasons why we encourage people to use more it,” he disclosed.

While delivering his key note address, Auwalu Ilu, chief executive officer of Ultimate Gas Limited has called on the marketers to adopt an efficient cylinder acquisition and management scheme as a way of ensuring standards as established by the Standard Organisation of Nigeria (SON).

He stated that, “NALPGAM is to facilitate the withdrawal of expired cylinders from circulation, encourage members to operate according to regulations and standards, invest in cylinder procurement and distribution and give one on one tip to members of the society on safety cylinder handling and management”

Auwalu added that there is also a need to adopt high volume low margin strategy and collaborate with retailers within areas of their business.

Joseph Ikem Odumedu, director general of SON who was represented by Obiora Manafa said for there to be good management of LPG cylinders in Nigeria, all LPG cylinders shall be owned and branded by marketers or plant owner for proper identification. He noted that maintenance of LPG cylinders shall be the responsibility of the filling plant owners and all filling plants in Nigeria shall establish test centres for inspection and testing.

IFEOMA OKEKE