60% Of Nigeria’s Population Yet To Adopt Cooking Gas, Says NIPCO Boss
. Emphasize Need To Crash LPG Prices
. Urges Govt To Support Local Refineries To Increase Gas Output
By Sulaimon Salau
Less than 60 percent of Nigeria’s 200 million population has embraced the use of Liquefied Petroleum Gas (LPG), otherwise known as cooking gas, the Managing Director / CEO of NIPCO Plc, Suresh Kumar has said.
Kumar, who reaffirmed the company’s commitment to driving sustainable energy growth through Liquefied Petroleum Gas (LPG) and Compressed Natural Gas (CNG), said the government should introduce more incentives to attract more investments into the sector.
He said the shortfall “highlights the immense opportunities within the market and underscores the need for more investments in gas processing, storage, and marketing to serve this large population,”
Speaking at the just-concluded National Conference of the Nigerian Association of Liquefied Petroleum Gas Marketers (NALPGAM) 2024, held in Lagos, said it is crucial for the government to back the local refineries in their efforts to significantly increase LPG output, as this would drive down retail prices and make the product more accessible to Nigerians,”
On the part of NIPCO, he said: “Our vision is to harness these opportunities and grow the country’s LPG consumption from 1.5 million MT to levels more appropriate for a population of over 200 million people.
Outlining NIPCO’s operations and future strategies in the downstream petroleum sector, he emphasised that the company’s long-term vision has always been to become a leader in the marketing and distribution of LPG.
Kumar said: “Our strategy was driven by the fact that Nigeria has over 200 trillion cubic feet of gas reserves.
“We believe that the country’s gas consumption must be optimized through the promotion of both LPG for domestic use and CNG for industrial and transportation sectors,” he said.
He emphasized the company’s investments in infrastructure, noting that NIPCO has expanded its LPG operations significantly over the years.
“In 2008, we invested in an LPG facility in Apapa with a capacity of 5,000 metric tons. Today, that same facility has grown to over 20,000 metric tons, thanks to strategic partnerships with our subsidiaries.
“We have also deployed LPG tankers and established multiple stations across Nigeria to ensure easy access to cooking gas for households nationwide,” Kumar revealed.
He further explained that while LPG is essential for homes, CNG will play a key role in powering industries and transforming the transportation sector.
“We are committed to aligning with Nigeria’s energy goals by promoting sustainable fuel options that leverage our vast natural gas resources,” he said
Kumar said, “At the time NIPCO entered the market, Nigeria’s domestic LPG consumption was around 50,000 metric tonnes (MT) annually,” he stated.
“However, the past 16 to 17 years have been a remarkable journey. Today, the market has grown from 50,000 MT to approximately 1.5 million MT per year.”
Despite the growth, the NIPCO boss pointed out that significant potential remains untapped.
“We believe that less than 60 percent of Nigeria’s 200 million population has embraced the use of LPG.
“This highlights the immense opportunities within the market and underscores the need for more investments in gas processing, storage, and marketing to serve this large population,” he said.
He also noted that substantial investments are needed to capture and process flared gas to increase domestic supply beyond the current 1.5 million MT to at least 5 million MT annually.
The NIPCO boss further revealed that local production of LPG remains inadequate. “Currently, less than 40 percent of the 1.5 million MT consumed domestically is produced locally.
“This is why the government must encourage companies like Chevron to convert more of their propane output into butane, which is more suitable for domestic use,” he explained.
According to him, boosting local production would attract further investments in pipelines, storage, and bottling facilities, as well as expand retail outlets and LPG depots across Nigeria.
“Our latest assessments show that the existing downstream infrastructure is capable of handling up to 5 million MT annually. This means we are ready to accommodate increased production from both associated and non-associated gas fields within the country,” he said.
Kumar urged the government to introduce incentives to encourage investments in gas processing.
“The key to unlocking the full potential of Nigeria’s gas resources lies in incentivizing investors to venture into gas processing,” Kumar said.
Responding to questions about the pricing of LPG amid a blend of local and imported supply, the Managing Director of NIPCO expressed optimism that prices would decline as domestic production improves.
“With the Dangote Refinery and other refineries now sourcing crude oil in local currency, the volume of LPG produced locally is expected to increase, which will, in turn, drive down the price of the commodity,” Kumar explained.
He added, “There is hope that the reliance on imported LPG will decrease, which will positively influence the prices at which the product is sold domestically. Greater local production will make LPG more affordable since it reduces exposure to foreign exchange fluctuations and international pricing dynamics.”
The NIPCO boss acknowledged that demand for LPG in Nigeria has been relatively stagnant due to the high cost of the product.
“The current high prices have limited consumption growth, but this situation is only temporary. With more players entering the gas processing sector, we anticipate a market correction soon,” he stated.
In the long term, the he expressed confidence that the market would stabilize. “We believe that with increased competition and expanded production, the market will find a balance,” he said.
He urged the federal government to support local refineries, including the Dangote Refinery, to boost domestic gas production.
“It is crucial for the government to back these refineries in their efforts to significantly increase LPG output. This will drive down retail prices and make the product more accessible to Nigerians,” he stated.
Kumar expressed optimism for more growth opportunities in the LPG market with the administration of President Bola Ahmed Tinubu giant strides especially with the current fiscal measures aimed at addressing final product cost in the sector.
According to him, the optics are good for the affordable cost of the product if all the measures being put in place comes to fruition and basic raw materials for cylinder production like steel are addressed frontally to attain lower cost of the material which is a key component in the use of LPG for domestic cooking.
