The Vice President, Prof. Yemi Osinbajo, on Friday commissioned a gas cylinder plant with 5 million annual production capacities belonging to Techno Oil Limited in Lagos.
Techno Oil is an integrated, wholly indigenous company which holds a diverse portfolio of prime investment in oil and gas, energy, infrastructure and manufacturing, started the project in 2015.
Speaking on the goal of the federal government approving the National Gas Policy, he said that it was to achieve in 10 years 5,000,000 metric tonnes of gas utilization in domestic, commercial and industrial scale in Nigeria and ensure overall improvement in the liquefied petroleum gas subsector.
“Our determination to prioritise the LPG sector development culminated in the Federal Executive Council’s approval of the National Gas policy in 2017, with dedicated input for the enhancement of the LPG sub-sector. Our driving vision has been to transform the sub-sector from a commodity sector based on export, to a value creation sector based on domestic utilisation and industrialisation.
“The goal is to achieve Five Million Metric Tonnes (5,000,000 MT) of domestic, commercial and industrial LPG utilisation in 10 years. Specifically, for household cooking, we are targeting a 40 percent adoption rate (i.e. 13.8m households) in 5 years, and 73 percent adoption in 10 years (33.3m households). We believe that the sub-sector can create up to 2 million new direct and indirect jobs in Nigeria,” he said.
According to the Vice President, there was just about nine per cent domestic utilization of LPG in 2015 when their government came to be, despite the country’s 3 million metric tones per annum production of LPG.
He said, “When we came into office in 2015, one of the issues we identified was the abysmally low domestic utilisation of Liquefied Petroleum Gas (LPG) in Nigeria. A nine per cent penetration rate nationwide, despite Nigeria’s domestic LPG production of 3 million metric tonnes (MT) per annum. For far too long our dominant fuel options have remained biomass fuels (firewood) or traditional fuels (petrol and diesel).”
The vice president noted that biomass fuels (firewood) or traditional fuels (petrol and diesel) come with health, environmental and social challenges, “ranging from increased carbon emissions; massive levels of deforestation, worsening the problem of desertification; and a high number of deaths resulting from indoor air pollution.
According to the World Health Organization, the smoke from burning wood fuels is a major cause of women and children mortality in Nigeria.”
He added that , “Natural Gas and its derivatives such as Liquefied Petroleum Gas (LPG) are on the other hand not only cleaner and more friendly to the environment, they also present substantial economic and investment opportunities across the Nigerian economy.”
On the reason why efforts in the past to enhance gas utilization in the country failed, Osinbajo blamed it on the fragmentation approach within the Federal Government, which is why their government lays much emphasis on coordination and collaboration.
He gave an account of some of the successes that have been recorded since the implementation of the coordination reforms to include; ”Removal of 5 percent VAT from the domestic pricing of LPG, as a first step in giving domestic output an advantage against imported products.
“Development of a Marketer Cylinder Owned Model instead of the current Consumer Cylinder Owned Model” which he said “will eliminate the consumers’ up-front purchase of LPG cylinders which in some cases are substandard, replacing it with a cylinder exchange, whereby the consumer only pays for the content.
No household will need to purchase or own an LPG cylinder. The Cylinders will be delivered and retrieved by the Marketers who will also be responsible for the maintenance and refurbishment of the cylinders, making LPG accessible to a whole new segment of non-LPG users” and “Strengthening the regulatory framework for the sub-sector.”
The Vice President commended the management of Techno Oil for the quantum investment made in the development of the gas sector and promised them of continuous support from the Federal Government to ensure that they succeed.
Earlier in her welcome address, the Executive Vice Chairman/CEO, Techno Oil Limited, Mrs. Nkechi Obi (MON), said that the population of gas cylinders in circulation in the country is just about 2 million, noting that the new Techno oil gas cylinder plant has the capacity to produce 5 million cylinders per annum and pleaded with the Vice President not to allow the plant to fail like others.
“The growth population of cylinders in the country is less than 2 million. Our current production capacity is 5 million. Instantly, Nigeria becomes a net exporter of cylinders in West Africa.
by November 2019. We have deployed over 50 units of LPG skid mounted Stations and haulage trucks to eradicate the age long trilemma of Accessibility and Awareness,” she added and thanked the Federal Government for the incentives and waivers that the company was granted for the importation of some of the raw materials and equipment.