LPG gas plantThe Nigerian Liquefied Petroleum Gas Association has called on the government to provide the enabling environment for private investors to fund the construction of strategic storages in the country.

NLPGA President, Mr. Dayo Adeshina, who said it had become imperative in the face of the recent rift between NLNG and NIMASA, which revealed the need for further investments in strategic LPG storage.

He said this would enhance seamless supply of LPG in the country.

Speaking further against the backdrop of the recent NLNG/NIMASA faceoff, Adeshina said it had become obvious that the NLNG could not be solely relied upon in the event that the crisis of such nature happened again.

He said, “The recent rift between NIMASA and NLNG may have ended albeit abruptly with the release of Gaz Providence for discharge of LPG, the situation however brings to fore the need for us to consider making investments in strategic storages as a way of averting the needless scarcity crisis, which the industry was thrown into.

“I think with these strategic storages built in some coastal areas like Benin and Port Harcourt that can be accessed easily by road, it would be possible to cushion the effect of any crisis in the future,” he said.

Adeshina, who recalled that there had been no disruption in LPG supply in the past years, observed that nobody would have imagined that a scarcity of such proportion would be experienced considering the fact that the market had always enjoyed seamless supply of the product from NLNG.

He therefore called on the government to provide an enabling environment for private investors to invest in the construction of strategic storages in the country ensure seamless supply of the product in the market.

Adeshina, who is also the Managing Director, Strategic Energy Plc, noted that the government could intervene by prevailing on the financial institutions to peg their interest on loans at rates that would be both reasonable and affordable.

He said, “I would like the Federal Government, through the CBN, to come up with a guideline that would make LPG investors have to access loan at reasonable rates from banks for their investments.

Making this possible I believe would create multiple effects on the economy as more employment opportunities and revenue earnings would be made through these investments.”

Adeshina added that it was quite inconceivable for the government to have preferred to sacrifice close to $400,000 in revenues that would have been generated during the crisis period in exchange for a smaller $150,000 that it wanted to realise in fines from NLNG through NIMASA.

He said over $400m had been invested in Liquefied Petroleum Gas by operators in the last five years notwithstanding government’s indifferent attitude to the LPG sub sector.

This, according to him, covers the construction of terminals, depots and bottling plants.

Adeshina lamented that the numerous bottlenecks created around LPG were indications that the government might not be interested in assisting the private sector to deepen the growth of LPG in the country

He wondered how the government expects the sector to grow with its harsh policy of high tariff and taxation on the product and equipment.

While the private sector has been supporting the LPG subsector with its various investments, Adeshina decried that the government had been slowing the pace of growth with unfriendly and unfavourable business climate created by it around the sub-sector.


Information from Punch was used in this report.