FG to Discourage Importation of LPG, Upgrade Local Supply

The federal government has expressed concern about the continued importation of Liquefied Petroleum Gas (LPG) into Nigeria, and would be taking fresh measures to grow local supply from the Nigeria Liquefied Natural Gas (NLNG).

The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, who disclosed this recently, explained that the government would set up an inter-ministerial task team to work with the NLNG on its challenges with access to the local market.

While the NLNG had reportedly supplied LPG through its Domestic LPG (DLPG) scheme to the local market and had increased off-takers of its LPG from six to 27 as at the end of 2017, reports however indicated it still had various market challenges which included levies and tax on its products as against duty waivers enjoyed by imported LPG.

Also, these market challenges have reportedly limited NLNG’s capacity to meet the demands of the local market even though it was committed to delivering 350,000 tonnes per annum of LPG, and perhaps push out imported LPG.

But responding to the challenge, Kachikwu stated the task team to be initiated by the government would include relevant stakeholders such as the Nigerian National Petroleum Corporation (NNPC) and Department of Petroleum Resources (DPR) amongst others.
He said, “We are going to set up a collegiate team on this. Somehow the commercial mechanism and the whole logistic challenges have gotten to a point where it is cheaper for you to import than to buy their product and that wasn’t the intendment obviously of the management.

“So, we all just need to sit down to say how do we reconfigure that in such a way that the cost of taking their own product is cheaper than bringing it in because we need to discourage importation of this product and save vital foreign exchange.
“An inter-ministerial team will work with them on that and ensure we arrive at some solutions,” the minister added.

Emphasising the need to end importation of LPG into the country and get NLNG to do supply more to the market, Kachikwu stated, “People must buy gas here, LPG especially, and not have to go abroad to bring it in because it does not make sense to get it from you. That is something we need to deliver as of yesterday and I charge all of you to work on this.
“Although your market is externalisation, but you are going to see that government policy is going to begin to drive you to internalisation.”