PPMC, LPG marketers seek removal of kerosene subsidy

The Pipelines and Products Marketing Company (PPMC) and Liquefied Petroleum Marketers have called for the total removal of subsidies on kerosene based on the government’s explanation that it was no longer sustainable for government to subsidise the product.

The Managing Director, PPMC, Mr. Haruna Momoh, said in a statement on Wednesday that resources being spent on kerosene subsidy could be put into more productive areas, such as infrastructure development, education, health and agriculture for the welfare of citizens.

He said that billions of revenue could be saved by Nigeria if the populace embraced the LPG (cooking gas), rather than relying on wood and kerosene for cooking.

Momoh lamented that Nigerians consumed 30 per cent or 250,000 tonnes out of the 850,000 tonnes of the LPG reserved for domestic use in 2013.

This, according to him, translates to a meagre consumption figure of 1.8 kilogramme per capita, compared to the West African regional average of 3.5kg.

This position was contained in the paper entitled: ‘Stimulating consumption of LPG in Nigeria’, presented at the inaugural conference of the Nigeria Association of Liquefied Petroleum Gas Marketers.

The PPMC boss said there was an urgent need for action to stimulate LPG use in the country while suggesting that Nigeria could adopt the Indonesian model to popularise the LPG.

He, however, lamented that some problems, including high cost of cylinders and accessory startup kits, low public awareness, poor infrastructure, kerosene subsidy and lack of investment in the value-chain had continued to make many Nigerians unable to embrace the LPG.

Similarly, the Executive Vice-Chair, Techno Oil Limited, Mrs. Nkechi Obi, has called for gradual removal of kerosene subsidy over a period of five years to compel Nigerians to use the LPG.

She made this call while presenting her paper entitled: ‘Enhancing Liquefied Petroleum Gas Growth in the Nigerian Market’.

She lamented that subsidising the consumption of kerosene was increasingly becoming harmful to Nigeria’s economy and asked the government to channel 20 per cent of what was being spent on the subsidy to the LPG market.

“In all sincerity, government subsidising kerosene is not sustainable and it is also not healthy because the world has moved on and Nigeria also has to move,” she said.

Obi said that the savings on the subsidy could be spent on the acquisition of gas cylinders to promote the utilisation of the LPG.

She also urged the government to invite entrepreneurs to invest in the LPG infrastructure the same way fuel depots development was executed, while assuring investors of good returns on investments.

Obi said that Techno Oil had since adopted an advocacy campaign, tagged ‘Going Green’ in a bid to champion the cause for Nigerians to switch from using wood and kerosene to the LPG.

This, she said, had in the past two years distributed 20,000 units of gas stoves at discounted price to boost LPG usage in the country.

With government incentives, she gave an assurance that the company would invest in cylinder manufacturing concern in the country.

The NALPGAM President, Mr. Basil Ogbuanu, said the purpose of the conference was to create awareness among the LPG marketers as well as to take positions on key contending issues in the industry.

This, according to him, includes the issue of cylinder, product supply, pricing, infrastructure, logistic and consumption.

 

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