The NIPCO Gas Limited, a subsidiary of NIPCO PLC, says it has plans to expand the country’s rural penetration of Liquefied Petroleum Gas (LPG), popularly called cooking gas, to a minimum of 50 gas skids throughout the country within the next 24 months.
The Managing Director of NIPCO PLC, Suresh Kumar, who disclosed this plan during the recent 13th NLPGA Conference & Exhibition in Abuja said
Kumar who spoke on the topic: “Pathway to rural LPG penetration: Boosting usage” highlighted the various intervention by NIPCO in the LPG value chain in the country.
To realize the plan, the MD said NIPCO has invested massively in the establishment of LPG distribution value chain by providing about 11,000 metric tons (MT) of coastal storage facilities, installation of over 100 Skids and bottling plants across Nigeria, as well as over 125 LPG tankers for logistics.
He said the company was also donating gas accessories to consumers to boost their LPG usage across the country, while low-cost distribution facilities, like mobile filling of cylinders through Rural Mobile Vehicles, have been introduced across the country.
“These are all efforts to promote LPG gas usage. In rural Nigeria, an average woman spends around five to six hours every day in the kitchen in the most suffocating and unhygienic environment due to the use of traditional fuels like firewood. Again, she spends an additional two to four hours in the collection of the firewood in the bushes and forests at great labour,” he said..
The culture of cooking gas usage in the country is predominantly urban-based, with more than 90 percent of LPG users in urban households, with less than 10 percent in rural areas.
In 2022, the World Bank development indicators put Nigeria’s rural population at about 46.48 percent of the country’s total population of over 200 million.
The MD said the poor culture of using gas in household cooking chores has necessitated the plan by the company to deepen LPG usage in the country to significantly improve penetration in the rural areas.
With a vast untapped LPG market of about 20 million households in rural areas alone, indications are that the country has space to supply about three million tons of LPG annually.
But, the effort to take the commodity to homes across the country has been hampered largely by inadequate basic infrastructure to rural consumers despite efforts by the Federal and some State governments to work in collaboration with Local Governments to provide the required facilities as well as create the awareness/sensitization of consumers.
The MD said the LPG marketers have faced several challenges, including creating awareness among households on LPG usage as well as efforts to help people overcome psychological barriers as a result of fear of abandoning old practices and misconception of the drive to embrace LPG as a cheaper, safe and most viable alternative.
Besides, he said the marketers are also facing the challenge of developing bottling facilities to facilitate the distribution of the commodity as well as the issue of creating a cost-effective environment and channels for distribution in the country.
“Some of the people in the rural areas who are yet to embrace cooking gas in their homes are resistant to change as a result of their cooking and eating habits. Some claim that food cooked with gas does not possess the same taste and not the same quality as those cooked with firewood.
“Our commitment is to create the awareness to convince the people that the use of LPG is actually a cheaper and healthy alternative fuel to the use of firewood, sawdust, and charcoal,” he said.
He said the industry must find a way to address the issue of affordability by the average low-income consumers due to higher product costs as a result of installation of the gas facilities and provision of the accessories, refill price compared to other fuels.
Again, with the absence of a rail system to convey the products to the rural areas, the MD said the marketers are grappling with the problem of a bad road network to take the commodity to the hinterlands.
Apart from the problems of underdeveloped Infrastructure and lack of distribution channels, Kumar the greatest challenge the marketers have been contending with was the issue of uncertainty over government policies, particularly as they subsidy, which would make it difficult to have an effective cost-reflective pricing regime that would enable prospective investors to recover their costs.
