Minister of Petroleum, Dizeani Allison Madueke
Members of the Liquefied Petroleum Gas Association (LPGA) have identified critical policy issues as responsible for the low consumption of cooking gas in the country.
The association said that addressing these issues was the only way the country could improve on the mass consumption of LPG or cooking gas like other African countries.
President of LPGA, Alhaji Auwulu Ilu, told THISDAY that one of the issues that the association was currently discussing with the government was how to reduce import duties on accessories to assist people in the start-off cost of migrating from either kerosene stove or firewood to cooking gas.
He identified what was hindering mass consumption of LPG as the start-off cost and the unit cost of LPG, pointing out that once they become affordable by way of import duty reduction, more Nigerians will key into cooking gas.
“In Nigeria, we are paying the commercial rate like any other person paying in the international market. Two, the tariff is high. For instance, like the cylinders we have just received, the duty payable on cylinder is 20 per cent. If you add other charges, it is like 30 – 35 per cent. You add VAT, the West African CIT and other charges associated with clearing, it goes to almost 35 per cent.
“One of the companies just imported easy cooker and the duty payable is about 30 per cent. By the time you add all these costs to the cost of cylinder – to the cost of other accessories, like regulator, it is beyond the reach of the ordinary people who we are trying to convert from firewood, kerosene to use of LPG, whereas if you look at the kerosene stove, it is only the stove you require… how much is it? It is about N1,000 while the cylinder costs about N8000 to N10,000, depending on the source.
“Then you add the cost of the regulator, hose, the cost of the banner… it is about N20,000 to start-off. So, it will be difficult to ask somebody to make that investment for him to be able to migrate from kerosene or firewood to LPG that does not need any initial investment to start using. People who are in the rural areas, they just cut the wood from the forest and start using”, Ilu said.
The LPGA President however disclosed that government is now committed to working towards promoting LPG for mass use, apparently because of the environmental issues.
He said that part of government seriousness in promoting cooking gas as an alternative to firewood and kerosene stove included a planned workshop where it would discuss with stakeholders the policy issues that would lead to the expansion of the LPG market in the country.
On the acceptance of LPG as an alternative to kerosene and firewood, Ilu said the LPG market had been increasing in the country.
“ So far, in August, we did almost over 100,000 tons and I am confident by December, we would have been able to pass what we did last year. Last year, we were able to do about 130,000metric tonnes (mt). So, it is a remarkable improvement over the previous years. In 2007, the consumption was about 77,000 mt. So in a matter of about five years, it has almost doubled… which is a very good improvement”.
Ilu however described these figures as insignificant considering the population of the country.
He said: “If we look at our population, a country that is over 160 million people still the per capita consumption is still very, very low compared to other West African countries.
“We are still the least in terms of per capita consumption. But I am confident about what is happening. The minister of petroleum is organising a workshop to look at the policy issue and you can see another workshop is coming up in December and on our own end of year conference is coming in November where all the issues will be discussed and some issues will be analysed and brought forward. So, I can say the market is increasing. It is expanding but not at the rate we expect it. But I believe sooner or later we will be able to make considerable improvement in terms of the volume within the country”.
He said that the association wants a situation where the level of consumption in Nigeria could be like what obtains in other countries in West Africa.
He said, “ in Cotonou which does not have a single drop of LPG but they are importing heavily, Senegal is also importing, Niger has started producing and Chad. If you look at their per capita consumption, if you look at their population and how much they are consuming , it is still higher than our own”
He said that with the rising cost of kerosene and firewood, more Nigerians will soon begin to think of using LPG.