Mohammed Shosanya
Hyde Energy, a global energy trading company,has advocated the need for the adoption of clean energy sources among Nigerians.
The company’s Chief Executive, Mr. Oladimeji Edwards,who said this at a press conference recently,assured his company’s commitment to making cooking gas accessible to many homes in Nigeria.
He added:”The Nigerian population is underserved with LPG. Morocco today has the biggest LPG business on the continent, and Morocco has a population of 60 million people, consuming about 5.5 million tons of LPG annually. In contrast, we are about 210 million people in Nigeria, and we consume about 1.4 million tons per annum today.
“In the LPG business, there is a convergence of events: there is deforestation, which means firewood is expensive and scarce and there is also no subsidy for kerosene. With these things converging, there’s no better time for the LPG business than now”
Speaking,Mr. Olumuyiwa Akande, the Head of LPG, emphasized that LPG is the future of the energy business in Nigeria.
He said that Nigeria is a gas-rich country, with more than 200 trillion cubic ft of gas reserves in six of the country’s seven sedimentary basins, which are commercially rich in gas.
He added: “I believe that it is the way to go as a country. For us at Hyde Energy, we have experienced exponential growth with our LPG business. By 2021, with the government declaring Nigeria’s ‘Decade of Gas,’ we had expanded our footprint in Lagos and Abuja. This increase in supply and demand has convinced us that the future is LPG.
“Two years ago, the Central Bank of Nigeria (CBN) stated, while announcing its plans for the N250bn Gas Expansion Fund, that “failure to harness its gas resources has had negative consequences for the country—economic, environmental, fiscal, and social—particularly as the industry has the potential to engender rapid growth in Nigeria’s non-oil economy.”
In 2021, the Nigerian government launched Nigeria’s ‘Decade of Gas,’ an initiative aimed at leveraging the country’s vast gas reserves to drive economic growth and development. The $20 billion initiative focuses on four key pillars: expanding gas infrastructure, increasing domestic gas utilization, growing gas exports, and attracting foreign direct investment into the gas sector.
The answer to how Nigeria will harness the potential of LPG lies in the four key pillars of Nigeria’s Decade of Gas initiative. If the plans outlined within these pillars are executed, the projected growth of the LPG industry will become a reality.Speaking on the investment, Mr. Edwards explained that “one of the ways will be to find gas within the ground, attract investments to extract that gas, develop the distribution network, and become like NLNG to the degree that supports the business.”
According to Nigeria LNG Limited’s report on Barriers to Market Development: Demand Pull vs. Supply Push, three things can be done to overcome the barriers to LPG adoption for market development: Accessibility, Affordability, and Acceptability.
To make LPG accessible, suppliers should ensure its widespread distribution to customers, eliminate long supply chains and infrastructure deficiencies, establish several local agents, make significant investments, and consider risk and Mega Tonnes of Coal Equivalent (Mtce) cost.
On the demand side, efforts should focus on increasing local LPG supply to households, creating smaller cylinders, ensuring full local sales and service, and facilitating fast and convenient refills with an abundant supply of cylinders.
Affordability is also crucial for customers. Suppliers should strive to lower LPG prices, reduce overhead costs, and develop small profit margins. Economic viability, subsidies for entry appliances, and third-party financial support should be considered as well.Ensuring public acceptance of LPG usage is equally important.
While there has been a significant increase in recent years, Nigeria can do more to promote the acceptability of LPG.Educating the masses on affordability, safety, and proper usage, as well as implementing a friendly household energy policy, are effective strategies.
