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LPG: NLNG Wants More Investments For Supply

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The Nigeria Liquified Natural Gas (NLNG) Limited has called on stakeholders in the domestic Liquified Petroleum Gas (LPG) value chain to invest in the supply of the product to ensure reliable and steady supply.
The company made the call in a statement issued by its General Manager, External Relations and Sustainable Development, Mr Andy Odeh, to mark 15 years of domestic LPG supply in conjunction with the Nigerian LPG Association (NLPGA).
The statement quoted the NLNG Managing Director, Dr Philip Mshelbila, as saying that the investment in supply would spark commitment along the value chain, including vertical integrations.
Mshelbila said NLNG would further invest in ‘Train 7,’ which would add about 35 per cent to its current capacity when completed, subject to gas supply and gas quality.
He added that other domestic producers of LPG would need to make investments to enable their product become available to the domestic market, rather than exporting it.
He said the interventions would reduce the switching cost to LPG, encourage more adoption, as well as reduce the cost of funding to support infrastructure expansion and growth as deliberate government action to encourage non-export of LPG by producers.
Mshelbila said other urgent interventions included clarity of regulatory guidelines and requirements, alignment of government enforcement agencies and the widespread dissemination of information on safe practices in the handling and use of LPG.
“Supply and gas gathering initiatives faced major challenges in recent times, and this is due to floods ravaging operational sites of NLNG’s feedgas suppliers,” he said.
He said there had been a state of emergency requiring declarations of force majeure.
The NLNG helmsman, however, assured continued operations at the company’s production plant.
“We continue to load and ship LPG to the domestic market.
“Therefore, we reassure Nigerians of our ongoing operations in immediate and look forward to an urgent return to normalcy.
“Prior to the flooding, we were contending with the unrelenting effects of crude oil theft, which directly and severely impacted the supply of associated gas to our plant by the upstream producers.
“We recognise the strides being made to address this by the government and its agencies and hope that this will soon translate into improved gas supply to our plant in Bonny,” he said.
Mshelbila said LPG supply was why the NLNG Board of Directors decided to intervene, increasing supply from 50,000 in 2007 tonnes to 150KT to 100 per cent, accounting for about 40 per cent of the domestic LPG (DLPG) market.
“Over the 15 years since 2007, NLNG has played a critical role in deepening the DLPG market with a reliable supply of LPG”, he added.
“Expanding access to energy that is cleaner, more reliable, and affordable, the number of its offtakers increased from seven at the onset to 42 today.
“The LPG ecosystem witnessed exponential growth across the value chain,” said Mshelbila.
He added that with the increased DLPG penetration and accessibility, there had been a remarkable reduction in the use of kerosene, firewood, and charcoal.
He explained that this reduced the risk of respiratory conditions associated with smoke inhalation and increasing alignment with the global drive for a cleaner environment and lower GHG emissions.
“Today, the Nigeria Liquefied Petroleum Gas Association (NLPGA) in collaboration with NLNG is celebrating the 15th anniversary of uninterrupted supply of domestic LPG in the country.
“The intervention has seen the supply of LPG grow from 60,000MT in 2007 to over a 1.3million MT in 2021 (a growth of over 1,000 per cent).
“Today, the Nigerian LPG market is adjudged the fastest-growing globally.
“This scheme has encouraged massive investments in LPG infrastructure and has created over 150,000 jobs in the sector and resultant increased tax revenue for the government,” he said.
According to him, the Federal Government’s Decade of Gas programme has further helped in driving interest in propane, evidenced by NLNG’s startup of domestic propane, which witnessed its first delivery in September 2021.
“NLNG has invested in a 13,000MT dedicated LPG carrier and security escort vessels facilitating efficient deliveries to Lagos and Port Harcourt terminals.
“It invested in the refurbishment of the Lagos receiving terminal improving coastal delivery of LPG.
“It has also invested in throughput capacity at the Port-Harcourt stockgap receiving terminal,” he added .
He congratulated NLPGA for supporting and sustaining the value chain for 15 years.
NLNG is owned by four Shareholders, namely: the NNNPC Ltd. (49 per cent), Shell Gas B.V. (25.6 per cent), TotalEnergies Gaz & Electricite Holdings (15 per cent) and Eni International N.A. N. V. S.àr.l (10.4 per cent).

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DAPPMAN Raises Concern Over FG’s New Tax Regime

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The Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN) has expressed concern over the new 0.5 per cent tax on gross turnover of the petroleum marketing firms proposed by the Federal Government.
Executive Secretary, DAPPMAN, Mr Olufemi Adewole, said at the maiden edition of the Platforms Africa Continental Forum in Lagos, that the tax would put many firms out of business.
Adewole said there were indications that fuel distribution crisis may soon hit the country, if the government implemented the new tax regime.
He was emphatic that more than half of the fuel marketing firms in Nigeria would close down, if the tax burden was slammed on them.
According to him, the imminent closure of businesses poses threat to the smooth distribution of petroleum products across the country.
“The petroleum marketing firms’ trading margin is too small that they cannot pay such amount sustainably.
“Petroleum marketers operate a very low margin but the turnover is very huge. Unfortunately the margin does not correspond with the turnover,” said Adewole.
He added that the margins they made when fuel sold at N40 per litre was the same when the price rose to N160 per litre and N200 per litre respectively.
According to him, “The Finance Act 2020 says the marketers have to pay 0.5 per cent from their gross turnover by the end of this year.
“It is unimaginable that probably half of the petroleum marketing firms existing now may go under, if the new tax regime is implemented.
“Except the regulator which is Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) approves a new margin for the marketers.”
He said the association had called on government to give petroleum marketers access to foreign exchange at the official Central Bank of Nigeria (CBN) rate to enhance the supply and distribution of Premium Motor Spirit (PMS) across the nation this yuletide season.
According to DAPPMAN, shortage of foreign exchange (forex) coupled with several unauthorised levies, bad roads are among the factors making fuel importation and distribution burdensome for members.
The Tide source reports that the fuel marketers recently bemoaned the acute scarcity of forex in the official market, which is currently threatening the importation, distribution and impacting deeply on prices of petroleum products across the country.

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Niger Wants NNPCL To Establish Truck Transit Parks

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Niger State Government has urged the Nigerian National Petroleum Company Ltd. (NNPCL) to establish truck transit parks in some strategic parts of the state to reduce traffic on highways.
The government identified towns such as Tafa, Suleja, Mokwa, Bida, Tegina, Lambata and Minna as major areas to be given attention in that regard.
The Permanent Secretary in the Ministry of Mineral Resources in Niger State, Alhaji Abubakar Idris, made the call during the meeting of National Council on Hydrocarbons organised by the Ministry of Petroleum Resources in collaboration with the State Government.
According to him, the establishment of the parks in the identified areas will reduce traffic on highways and generate revenue for the state and country at large.
In the meeting entitled: “Roadmap and Strategic Option towards achieving energy transition in Nigeria”, Idris presented a memorandum from the State Government to the council on the need for the establishment of the transit parks.
He explained that it would also create a partnership between the state and federal government to reduce the negative effects of heavy road traffic on highways.
He explained further that the trucking industry was indispensable to the Nigerian economy as “truckers are responsible for delivering fuel from depots to filling stations where they are dispensed.
“For these reasons, funds need to be released to build truck parks for ease of operations”, he said.
He also called for the establishment of a frontier basin development commission with its headquarters in Niger State.
According to him, the establishment of the commission will expedite the effective implementation of Petroleum Host Community Trust Fund and frontier basin exploration fund as captured in the Petroleum Industry Act 2021 with headquarters in Niger.
He said Nigeria’s frontier basins consist of Anambra basin, the lower, middle and upper Benue trough, the South eastern sector of the Chad basin, the Mid-Niger (Bida) basin and Sokoto basin.
According to him, the basins would be better positioned for the opportunities in the hydrocarbons natural gas, oil and other minerals.
He noted that the establishment of frontier basin development commission would offer greater opportunities to actualise the state dream of oil and gas economic value-chain and industrialisation in Nigerian frontier basins.

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Motorists Groan Over Fuel Scarcity

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Long queues resurfaced in Lagos as motorists spent hours at filling stations to buy Premium Motor Spirit (PMS), popularly known as petrol.
The situation was worse on Ikorodu Road, Maryland, Ikeja, Anthony, Bariga, Ilupeju and Gbagada areas as motorists were agitated for spending hours on queues.
The Tide source reports that the development left commuters stranded with gridlocks in major areas of Lagos as motorists queued to buy the product.
The source also reports that only filling stations owned by Major Oil Marketers Association of Nigeria (MOMAN) had petrol and sell at the regulated price of N170 per litre.
Some stations owned by Independent Petroleum Marketers Association of Nigeria (IPMAN) sell between N200 and N210 respectively.
A motorist, who identified himself as Mr Foluso Saliu, told the source that he had been on the queue since 6.30 a.m. hoping to get fuel and return to work.
He said government should find a lasting solution to petrol supply in Lagos to avoid panic-buying.
“Scarcity has been frequent during the ember months and l hope it will be addressed,” he said.
Another motorist, Mr Julius Albert, urged filling stations to avoid selling petrol in jerry cans to allow vehicles to buy on time.
Albert appealed to the government to fully deregulate the downstream sector of the petroleum industry if that was the solution to availability of petrol without stress.
According to him, the product seems to be available in some filling stations but they choose to hoard it and sell at higher prices.
Queues were seen at Mobil, NNPC, Conoil, Oando and Nipco filling stations on Ikorodu Road.
Also, queues were cited at TotalEnergies, TMAAC on Bank Anthony Road and Conoil, opposite LASUTH.

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