Home Energy NLNG’s subsidy on cooking gas to grosses $50m

NLNG’s subsidy on cooking gas to grosses $50m

The Chief Executive Officer of the Nigeria Liquefied Natural Gas Limited (NLNG), Mr. Babs Omotowa has said that the company has subsidized the cost of Liquefied Petroleum Gas, otherwise known as cooking gas, meant for local consumption to the tune of $50 million since the commencement of its intervention scheme geared towards product availability.
Omotowa, who spoke at an NLNG Conference held in Abuja, said the firm, which currently supplies about 80 per cent of the total cooking gas consumed by Nigerians, is committed to increasing the product to the Nigerian market.
The chief of NLNG, who advocated for increased investment across the value chain to enable sustained and reliable product availability, also affirmed the commitment of the firm to provide the nation with sufficient volumes of LPG based on production operations from its six train facility at Bonny, Rivers State.
“NLNG which currently supplies some 80 per cent of the total cooking gas consumed by Nigerians, has also subsidised the product to the cost of about $50m since the intervention began,” he said.
He added that: “NLNG’s intervention in the domestic LPG market began in 2007 with the dedication of some 150,000 metric tons of cooking gas annually, in response to an acute shortage of the product in the market at the time.
“Only last year, the company further increased this volume by 66 per cent to 250,000 metric tonnes to meet growing utilization of cooking gas by Nigerians.”
Omotowa, in a presentation titled: ‘NLNG’s Role in Developing the Domestic LPG Market’, delivered on his behalf by the Marketing and Development Manager of the company, Mr. Abdulkadir Ahmed, disclosed that only about 600,000 metric tons of cooking gas had been absorbed by the local market since NLNG’s intervention in September 2007 because of market inefficiencies across the LPG value chain.
He said absence of a functioning cylinder manufacturing plant; inadequate storage, poor transport network and infrastructure, limited jetty availability and low-priority berthing given to LPG vessels, have all conspired to thwart the market’s ability to absorb NLNG’s increased supply, and have become some of the challenges facing the LPG subsector of the gas industry.

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