Business

Rising gas costs prompt Nigerian households to switch to alternative fuel sources

[ad_1]

Although it can theoretically produce enough liquefied petroleum gas to meet local demand, Nigeria has been unable to deepen the penetration and utilization of liquefied petroleum gas (LPG) in the country.

Although liquefied petroleum gas is a safer and more environmentally friendly cooking food fuel compared to kerosene and charcoal, many Nigerian households, especially in rural areas, still cannot because of various reasons, including insufficient distribution and storage infrastructure. Obtaining this kind of energy is costly, unsafe and logistical bottleneck.

Recently, in some areas of Lagos, the price of a 12.5 kg bottle of gas has soared to more than 5,000 naira, arousing strong complaints from domestic consumers, who reluctantly watched the impact of inflation and other economic realities on their purchasing power. The smaller.

Read: NCDMB launches LPG composite cylinder manufacturing plant in Bayelsa

What are the experts, FG and NLNG talking about

Natural Gas Analyst Omono Okonkowo interview On Tuesday, Arise TV talked about some of the reasons why it is difficult for Nigeria to achieve optimal penetration of liquefied petroleum gas.

She cited factors such as the lack of adequate investment in distribution and storage facilities, especially in rural areas, the lack of clear government policies to promote the penetration of LPG, insufficient stakeholder cooperation, high cost of cooking gas, and The country’s growing insecurity situation. Responsible for the sub-optimal use of liquefied petroleum gas in Nigeria.

“Many Nigerians in rural areas do not have access to [to cooking gas] Due to lack of warehousing and distribution facilities and weak transportation infrastructure to rural areas,” She said.

Read: Techno Oil begins mass production of locally made cylinders

She also said that some industry participants rely on the high parallel market dollar exchange rate to import LPG into the country, which further pushes up the cost of cooking gas for end users, especially making it unaffordable for low-income earners.

“For the successful penetration of liquefied petroleum gas in sub-Saharan Africa, we need to lay a good foundation, including distribution and storage, and policies to ensure that we have a favorable investment environment,” She said.

“We have a lot of natural gas, but there is no infrastructure around natural gas resources,” She further stated. “In order to reduce imports, sufficient investment is required. Natural gas suppliers are importing liquefied petroleum gas and paying in U.S. dollars, which will affect retail prices due to inflation.”

Read: Oil marketers begin to use N250 billion loans to convert 7,000 outlets into car gas stations

She believes that despite the resources, the government lacks a clear LPG policy and therefore lacks investment.

For its part, the federal government has repeatedly reiterated its commitment to promoting the adoption and penetration of LPG in the country. In February of this year, FG revealed its plan to convert 1 million cars to gasoline for free in its car natural gas plan. Since then, not much work has been done in this area.

Also in April this year, FG disclosed plans to launch LPG distribution channels in every local government in Nigeria. Mr. Timipre Sylva, Minister of State for Petroleum of Nigeria, said:

“The goal of the Ministry is to alleviate Nigeria’s energy challenges. Clean gas is the key to this, because 70% of greenhouse gas emissions are caused by deforestation.

This liquefied petroleum gas project will enable us to allow rural women to use cleaner energy for cooking. “

Read: Sahara Gas Vessel delivered 7,000 tons of historic liquefied petroleum gas to Nigeria, thereby increasing the supply of liquefied petroleum gas

Similarly, we have not seen much work in implementing this policy statement.

Also in April this year, FG announced plans to inject 50 to 10 million liquefied petroleum gas (LPG) cylinders into the market by 2022. Mr. Dayo Adeshina, the project manager of the National LPG Expansion Implementation Plan, disclosed this in a publicity seminar regarding the adoption and implementation of stakeholders in the LPG industry. In Lagos, he pointed out:

“The federal government is working hard to inject 50 to 10 million cooking gas cylinders into the market within the next year. We are starting cylinder injection in 11 pilot states and the first phase of FCT, with two states in each geopolitical zone.

These states are Lagos, Ogun, Bauchi, Gombe, Katsina, Sokoto, Delta, Bayelsa, Ebony, Enugu, Niger and Federal Capital Territory. The cylinder will be injected by marketers. The marketing staff will be responsible for the cylinders, and the replacement will be done at home, not at the gas station. “

Despite these policies, Nigerians find it increasingly difficult to continue to buy cooking gas due to rising costs.

Read: How to obtain CBN’s N250 billion natural gas industry intervention fund

How Nigerians reacted

Rising prices of liquefied petroleum gas have caused losses to many Nigerians. Some interviewees who spoke with Nairametrics said:

“I have to reuse kerosene and sometimes use charcoal grills to cook for my family. A bottle of 12.5 kg of LPG costs more than N5,000. In Nigeria, cooking gas is becoming gold. Although kerosene is not cheap, but I can buy at least a small portion every day to meet my needs.” – Chioma Agu

“It’s becoming more and more difficult to refill my gas cylinders. Everything is so expensive now. The wages remain the same, but the rising cost of goods makes Nigerians poorer. When the price of cooking gas reaches N4,000, we It’s complaining. Now it’s rising further and sometimes it’s not available at gas stations. The government needs to do more to alleviate the suffering of Nigerians.” — Kenneth Odu

“I now switch between electric stoves and gas stoves. Although the electricity bill is high, our yard still uses the old metering system, so I use electric stoves to cook more to save gas. If they eventually install prepaid meters , I’m not sure what I will do. If gas prices continue to rise, I may re-use kerosene.“——Emanuela John

“The situation in this country is getting crazy. The government must do something about rising commodity costs. The ordinary Nigerians have no access to gas, which frustrated all their discussions about deepening the use of liquefied petroleum gas in the country.” – Thorpe Darrow

Bottom line

Although there are many plans and statements about deepening the adoption of LPG in the country, the government needs to combine conversations with actions to ensure that these noble policies are implemented.

Last month, Nigeria Liquefied Natural Gas (NLNG) Co., Ltd. stated that by supplying approximately 370,000 metric tons (MT) of liquefied petroleum gas (LPG) to the domestic market, the company met about 40% of the domestic LPG market’s demand. In 2020, this is a far cry from Nigeria’s level of meeting domestic demand for liquefied petroleum gas.

If it remains unchecked, the rising cost of LPG may become a curve ball for the government to push the country to adopt LPG on a large scale. There is still a lot of work to be done, not only to provide the necessary infrastructure to achieve the LPG goal, but also to restore the value of the naira and reverse inflationary pressures. Nigerians become poorer even when they work hard.

Related Articles

Leave a Reply

Your email address will not be published.

Back to top button