The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has called on large consumers of petrol and diesel, such as schools, banks, hotels, factories, and estate developers, to transition to gas in order to maintain sustainable operations. This call was made during a meeting in Lagos with various oil and gas associations, as well as chief executives of these large companies. The NMDPRA emphasized the dangers of installing unlicensed diesel storage and the need for obtaining licenses from the authority to store large volumes of petroleum products.
The NMDPRA encourages businesses to take advantage of the evolving opportunities in the gas value chain by utilizing gas derivatives, such as Liquefied Natural Gas (LNG), Liquefied Petroleum Gas (LPG), Compressed Natural Gas (CNG), Autogas, Propane, and Butane. By doing so, businesses can hedge against future global uncertainties in diesel supply and promote sustainable business growth.
However, during the meeting, LPG stakeholders raised concerns about the difficulties in obtaining NMDPRA licensing and permits, particularly for LPG retailers and operators. They emphasized that the high cost and rigorous process of acquiring permits affects LPG distribution to the general public or consumers. The NMDPRA officials assured the stakeholders that fulfilling all requirements will lead to successful licensing.
Additionally, LPG retailers and operators highlighted the issue of affordability for the average consumer. They urged the authority to come up with a strategy that works for all stakeholders and not just large-scale businesses. The National President of the Nigerian Association of Liquefied Petroleum Gas Marketers (NALPGAM), Mr. Oladipo Olatunbosun, specifically requested a review of the pricing of cooking gas to attract more utilization and penetration.
Lastly, the NMDPRA has yet to enforce sanctions on all illegal LPG skid operators within their operational cycle to create opportunities for legitimate marketers. The agency cannot expect full compliance with its demands if it fails to take action against illegitimate marketers and operators in the country.
It is our opinion, and recommendation that the NMDPRA specifically and strategically meet with LPG retailers, operators, and marketers in the country if they want to work towards more utilization of the product. As seen in the meeting, almost all those physically present and available online were operators who still experienced major issues with the agency’s approach. A dialogue between these specific sets of stakeholders can further pave the way for large-scale businesses to use LPG. as its availability and affordability would be easy.