Home » GAS » Fuel Subsidy Removal: Stakeholders State Why Autogas Should Be the ‘Alternative Fuel’ Government Can Pursue

Fuel Subsidy Removal: Stakeholders State Why Autogas Should Be the ‘Alternative Fuel’ Government Can Pursue

Photo: from Left, Mr. Felix Ekundayo,, President of the Nigeria Liquefied Petroleum Gas Association (NLPGA) and some of the participants at the recently held LPG conference in Abuja

The recently held Liquefied Petroleum Gas (LPG) conference further gave an insight into how critically important the commodity is to the nation’s economic development.

It was a congregation of stakeholders in the LPG value –chain with diverse experiences who also made contributions and gave reasons why Autogas should be embraced as an alternative to petrol in Nigeria.

The conference titled “LPG- Saving Nigeria from the Brink: Gas for Vehicles, Generators & Agriculture,” unfolded as a crucial forum for in-depth discussions, shedding light on the latest industry trends, developments, and the pivotal role of LPG in the nation’s economic landscape.

It also served as a pivotal catalyst for thought leaders to address the critical challenges and opportunities within the Nigerian LPG sector. Focused on the theme, “LPG- Saving Nigeria from the Brink: Gas for Vehicles, Generators & Agriculture,” the event provided valuable insights into the potentials of LPG to alleviate the nation’s energy crisis. Discussions delved into the diverse applications of LPG in vehicles, generators, and agriculture, sparking robust conversations among stakeholders.

It eventually became a platform where strategies to propel the LPG industry forward and contribute significantly to Nigeria’s economic growth were explored and deliberated upon.

To set the conference going was the President of the Nigeria Liquefied Petroleum Gas Association (NLPGA) Mr. Felix Ekundayo, who in his welcome address at the inauguration of the event underscored the indispensable role of LPG in Nigeria’s evolving energy scenario, citing a remarkable 2.167% growth in LPG utilization between 2006 and 2022.

He projected the industry’s continuous growth, particularly with the Federal Government’s renewed focus on gas, contributing to a turnover of approximately N2 trillion.

In his presentation at the meeting proper, he delved into the government’s commitment to advancing the gas industry, with a specific focus on Autogas. He identified Autogas as any gas suitable for running vehicles or internal combustion engines, and therefore four areas where autogas is critical for usage at the moment. He advised the government to focus on the Power, Industrial, Autogas, and Domestic sectors for use.

Highlighting the “Nigerian Paradox” in the gas sector, he pointed out the need for robust policies across the gas value chain. He stressed the urgency of addressing challenges in the gas industry to harness its full potential for economic and societal benefits.

The Minister of State (Gas) Petroleum Resources, Ekperipe Ekpo also at the event reiterated the government’s commitment to addressing the energy transition gap urgently. He acknowledged NLPGA’s efforts in contributing to the impressive growth in the LPG sector, generating over 150,000 jobs and increasing LPG consumption from 60,000 tonnes in 2007 to over 1.3 million tonnes in 2021.

Making his own contribution Michael Oluwagbemi, Chief Executive of the Presidential CNG Initiative, emphasized the need for Nigeria to pursue cleaner energy sources, advocating for partnerships and a transition to various fuels, including LNG. He supported the government’s initiatives, such as the National Transportation Mass Transit Policy, requiring all commercial vehicles to run on gas by 2024.

Akachukwu Nwokedi emphasized Autogas as a key contributor to a greener and more decarbonized transportation sector. He stressed the vital role of gas in achieving “net-zero” by 2060, calling for increased offtake to support these goals.

Sekhar Vajalla highlighted KHNL’s commitment to injecting at least 500,000 tonnes of LPG by 2024. Drawing parallels with New Delhi’s case study, he stressed the role of government intervention and the necessity of regulations for licensing and certifications. He highlighted the absence of pricing conclusions, call for competition and prioritizing the domestic market.

Addressing regulatory hurdles, Abel Igheghe, from a regulatory standpoint, expressed the government’s commitment to making Nigeria a gas-based economy. He acknowledged the need to review guidelines in collaboration with regulators to create a more enabling environment for stakeholders.

The role of Nigeria Liquefied Natural Gas Limited in achieving 5 million tonnes, Tolu Longe, Head Process Control at Nigeria LNG Limited (NLNG)stressed how this could be achieved. She provided an insightful presentation on the road to achieving 5 million tonnes of LPG consumption.

She began with a historical overview, highlighting NLNG’s intervention from nearly 60,000 tonnes in 2007 to over a million tonnes today. Longe emphasized NLNG’s public campaigns promoting LPG’s benefits over other energy sources, contributing to the growth of the entire LPG ecosystem. Notably, 100% of NLNG’s produced LPG is now infused directly into the domestic market, supplying about 40% of Nigeria’s total LPG consumption.

According to her, the NLNG plans to boost new volumes, with a capacity to inject 650,000 to 700,000 tonnes of LPG into the domestic market. She stated that the NLNG Train 7 Project is aiming to increase capacity by about 35%, translating to approximately 1 million tonnes per annum

Joy Shaiyen, the Coordinator of the Women in LPG Global Network, Nigeria Chapter, delivered a comprehensive presentation on LPG Interventions: Past, Present, and Future during the third session on the first day of the conference in Abuja.

Transitioning to the Nigerian context, Shaiyen provided insights into the sixteen-year trajectory of LPG in Nigeria, specifically focusing on the domestic interventions by the Nigerian Liquefied Natural Gas (NLNG). Notable statistics included a remarkable annual consumption growth of 2000%, an increase in offtakers from 6 to 43, and a substantial growth in coastal storage volume. She underscored the impact of subsidy removal on kerosene, leading to a decline in imports and a subsequent shift in favor of LPG.

She emphasized the critical role of government intervention, policy, and the private sector as success factors in LPG initiatives. She particularly highlighted the often-overlooked aspect of gender mainstreaming and the necessity to consider the rural population, constituting 46% of Nigeria’s inhabitants. Her recommendations included active involvement of rural women in the transition, subsidizing cylinder acquisition for rural communities, utilizing the Midstream and Downstream Infrastructure Fund for conversion funding, and ensuring a minimum percentage of women’s involvement in intervention programs.

Tayo Akinkunmi while addressing the challenge of achieving 5 million tonnes, also emphasized the need for a thinking overhaul, security improvements to combat pipeline sabotaging, and streamlining regulatory processes.

In his contribution, Adebayo Adedeji, a member of the panel of discussions, spoke on the potential of agriculture in Liquefied Petroleum Gas (LPG) adoption, saying that of the projected 5 million tonnes, agriculture can consume the most. He highlighted the critical role of energy in addressing challenges in power, storage, irrigation, and processing in the agricultural sector.

Alain Deleuse shared insights from Belgium and France, where LPG is used as a weeding agent for potato farming and to power generators for processing, storage, and irrigation. He stressed the need for government intervention, incentives, and ensuring the total consumption of locally produced gas to meet growing demand.

During the panel session, Elvis Duruji spoke on the collaborative effort required for a successful roll-out. He discussed the openness of the Petroleum Industry Act (PIA) to various gas options, stating that there is a need for sustainability and strategic choices. Prince Bambo Ademuluyi suggested deploying autogas for commercial purposes initially, offering incentives for the conversion of tricycles and mini-buses.

On the multiplier effect of the Petroleum Industry Act (PIA) in the LPG Sector was discussed in one of the panel sessions, where one of the panelists discussed the neutrality of the PIA regarding the fuel of choice. In this case, Adeoye Adefulu highlighted the responsibilities placed on the Nigeria Midstream and Downstream Regulatory Authority ( NMDPRA), covering licensing, competition, and pricing. While Dapo Akinosun SAN emphasized the need for regulations on consumer protection to avoid arbitrary price increases and monopolies. The discussion also touched on dispute resolution mechanisms and environmental standards.

Also one of the critical things that is very germane to Autogas utilization in the country is the rural penetration which is essential to boosting the usage of the commodity. Some of the challenges noticed include acceptability, high setup costs, and security concerns. Initiatives to engage rural areas were highlighted, with success stories in sensitization programs and community empowerment. Affordability and infrastructure development were also considered crucial for rural penetration.

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