The price of cooking gas has increased in the market.
The Nigeria LNG Limited (NLNG) has increased its supply of liquefied petroleum gas (LPG), popularly known as cooking gas, to the domestic market.
The company increased supply from 150,000 to 250,000 metric tonnes per annum (MTPA).
The General Manager, External Relations, of the company, Kudo Eresia-Eke, said the decision to increase the supply level by 67 per cent was in continuation of the company’s commitment to re-create a domestic LPG industry in Nigeria to ensure ample stock of the alternate fuel and promote the use of cooking gas, noted necessary for its environmental friendliness including its role in controlling deforestation.
It is not clear if the increased supply would lead to a reduction in price for consumers. Already, the increased demand has led to an increase in price with a 12 kilogramme cylinder of the gas, which sold for between N3, 000 and N3, 300 now selling for between N3, 900 and N4, 200.
The NLNG, the leading gas production and supply company, currently accounts for over 70 per cent of cooking gas used in Nigeria. It is a Joint Venture company whose shareholders include the Nigerian National Petroleum Corporation (49%), Shell (25.6%), Total LNG Nigeria Limited (15%) and ENI International (N.A.) S.a.r.l (10.4%).
Mr. Eresia-Eke said the need for the current increase in supply of the commodity arose from its recent survey of the domestic gas market, which showed that domestic LPG consumption had exceeded 150,000 MTPA, a demand which was less than 60,000 metric tonnes when NLNG intervened in 2008 with domestic supply of cooking gas.
Nigeria, with gas reserve reputed to be in excess of 187 trillion cubic feet, is the largest producer of liquefied petroleum gas, LPG, in West Africa. However, LPG utilization in Nigeria has been abysmally low, with the consumption figures put at about 110,000 MTPA in 2005.
The poor utilisation level was attributed to the poor operational state of the country’s four refineries which could not cope with needs of Nigerians.
To redress the situation, government directed that a percentage of LPG produced from the NLNG, NNPC/Chevron and NNPC/ExxonMobil Joint Venture NGL plant in Bonny River Terminal be set aside for the domestic market, with about 150,000 MTPA from the NLNG dedicated for that purpose on a free on board basis in 2006.
Experts say increased use of LPG in the domestic market has helped in reducing the level of destruction to the environment, reduction in incidence of respiratory health problems attributable to wood smoke, reduction in the poverty level, while jobs are created for Nigerians from new business opportunities.
The Managing Director of NLNG, Babs Omotowa, said that the NLNG was extremely delighted it has been able to live up to its vision to help build a better Nigeria, through its ability to increase its supply of cooking gas to the domestic market.
He noted that the assurance of steady supply of the commodity should boost investors’ confidence in the cooking gas industry, an industry which currently needs investments in storage, transportation, and cylinders.
Mr. Omotowa said he was hopeful that the domestic market would grow even beyond cooking gas, to low-cost retrofitting of cars, to use both gasoline and natural gas, considering that LPG was less expensive than petrol.
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