As 12.5 Kg Cooking Gas (LPG) Rises to N6, 250 Today Expert Proffers Solutions
By Samuel Onungwe
Having given reasons for the hike in Liquefied Petroleum Gas, LPG price in Nigeria popularly known as cooking gas, Engr. Emeka Uchendu, proffers achievable solutions to the problems in order to make the product available and affordable, and save the lives of trees and forests which are currently been utilized largely in the rural areas for domestic heating.
NLNG should increase supply to the local market.
“The Nigeria Liquefied Natural Gas Company Limited from inception never had the mandate to supply products to local market even though they do it on small scale. However, if they boost their supply to the local market to bridge the shortfall then there it will be good for the Nigerian masses,” Engr. Emeka Uchendu said.
The oil and gas expert explained that the annual demand for LPG in Nigeria currently stands at 1.2 million metric tonnes of which NLNG was initially supplying 150 thousand metric tonnes and recently increased it to 300 thousand metric tonnes and with a promise to further increase it to 450 thousand metric tonnes.
FG should remove the 7.5% VAT on imported LPG
“The present administration of President Muhammadu Buhari recently reintroduced Valid Added Tax, VAT on imported LPG which was removed in 2017. This action has tremendously affected the price of LPG and for the fact that Nigeria at present imports 60 – 65% of LPG used locally. This transfers a huge financial burden to the importers thus they become discouraged even though the end users bear the brunt of the burden.”
DPR, PPPRA, Jetty Owners, Unions Component
Engr. Uchendu explained that if these players which he listed as the Department of Petroleum Resources, Petroleum Products Pricing and Regulation Agency, Jetty Owners, and Oil and Gas Unions reduce their heavy levies and taxes imposed on marketers to the barest minimum it would be for the good of all.
Although he declined details on this, he reluctantly gave a hint saying that a 20MT truck of LPG spends between 120, 000 to 160, 000 Naira on levies and taxes.
More terminals should be built across the nation
“Currently, Nigeria has only two jetties hmm NOJ and I think, Apapa Bulk situated in Lagos where NLNG mother vessels can berth and discharge LPG. You see, the problem with these jetties is that the Federal Government gives berthing priority to vessels carrying petroleum products (PMS, DPK, AGO), because according to the federal government, they do not want petrol scarcity in the country,” Engr. Uchendu. He pointed out that this policy has been in existence since the day of President Goodluck Jonathan. “So, it is either the NLNG vessel (and others with LPG) wait and incurs demurrage or we use smaller vessels to take it to Warri, Port Harcourt, or Calabar ports.
“This is the major reason NLNG exports and earn Dollars than incur demurrage and still earn Naira. If the federal government can pay demurrage for petroleum products vessels, why not pay the same for LPG vessels.
“Every businessman presented with these options would rather choose to sell internationally, after all, they were never meant to sell locally.
“Recently, STOCKGAP built terminals in Lagos and Port Harcourt, but I do not know why NLNG stopped delivering to Stockgap terminal in Port Harcourt although, they delivered to PH for some time. I am not certain if they still deliver to Stockgap terminal in Lagos now.”
FG should make the gas industry lucrative for more investors to come in
Calling on the federal government to make that sector of the economy lucrative instead of what he describes as paper talk he mentioned that:
“Apart from the NLNG, the largest LPG processing plant is (125mmscfd) currently in Nigeria is owned by Sterling Oil in Delta state, but Waltersmith LPG plant (200mmscfd) in IMO state will be the largest when commissioned. There are other few smaller plants too, but Nigeria needs more plants to come up.”
The fine gentleman called on Nigerians with the financial muscles especially the politicians to set up their plants rather than lodging their money in foreign banks as this would not only earn an immense financial return but also create a job for the teaming unemployed graduates among others.