NLPGA bemoans N1trn fuel subsidy
The difficulty buoyed by Federal Government’s inaction to end over N1 trillion average annual investments on fuel subsidy has, according to the Nigerian Liquefied Petroleum Gas Association (LPGA), created a shortfall of 49 million cylinders in the system.
President of the NLPGA, Nuhu Yakubu, who confirmed the “dangerous trend” to Newdawn on the sideline of a press conference, registered the displeasure of stakeholders in cooking gas sector with fuel subsidy.
“Many local cylinder manufacturers have closed shops regrettably due to the way government is handling the energy mix. The inability of the government to deregulate the Premium Motor Spirit (PMS) also known as petrol has made it to keep wasting scarce resources on fuel subsidy while it keeps expending scarce resources yearly to import LPG cylinders from Turkey, China, India and other Asian countries,” he said at the press conference to herald the group’s 8 th annual conference themed; “LPG diversification: Expanding the LPG frontiers in Africa.”
“The last time we heard that over N1 trillion was expended to subsidise fuel. Subsidy is a killer of economy, we – as a nation – are just technically subsidising petrol for the consumption of millions in West Africa.
“We need to end fuel subsidy by deregulating petrol. Let the growth being experience the LPG market be felt elsewhere,” he said, adding that the “Nigeria’s LPG sector is fastest growing in the World. It grew between 2007 and 2017 by over a 1000th per cent growth.”
“What is spectacular is the fact that it has been private sector driven. It is a testimonial that with just the creation of enabling environment with deregulation. If the LPG sector is able to grow with deregulation just imagine the level of growth if this is extended to petrol and others.”
Stating that this growth rate could have been higher, the NLPGA’s boss said: “The reason LPG has not grown at the expected pace is that the sector is being pulled down by market forces from other fuels that are yet to be deregulated.”
Another reason, according to him, is that the LPG we need is being flared, it is being set on fire somewhere in Nigeria and the country is not doing enough to tame this tides.
“We are a net exporter of LPG meanwhile we still have a lot of LPG that is being flared. Just imagine the level of health hazards being faced by our women who still use firewood.
“We don’t need subsidy in our sector. Subsidy is a killer of our economy. Even the petrol we subsidise benefits the rich and the middle class. Their number is even so small,” Yakubu said.
Declaring that local “LPG cylinder manufacucturers are going into extinction,” the NLPGA boss noted that for this to be addressed, the government needs to incentivize the sector.
This, first vice President of NLPGA, Engineer Duru said, could be done through Port duty reductions; Tax holiday and tax reduction for local cylinder manufacturers; Incentivise cylinders distribution in Nigeria; Incentivise conversion of vehicles from petrol to gas and to Incentivise the cost of entry for millions of Nigeria who still face the health hazards of using the dirty fuel.”
