FG Bans Retail of Bulk Lubricants from January 1, 2010

 …To Accelerate Development of Cooking Gas Marketalt 
 
  Against the backdrop of the federal Government’s renewed policy of repositioning the Oil and Gas sector, the Minister of Petroleum Resources, Dr. Rilwanu Lukman has directed that by January 1, 2010, all bulk sales of lubricants to retailers must stop nationwide just as he disclosed that the Federal Government has fashioned out a new strategy for the development of the LPG market in the country because the domestic gas utilization in Nigeria remains abysmally low.

In an address to the Ministerial Committee charged with the responsibility of sanitizing the lubricant market, the Minister disclosed that the Department of Petroleum Resources (DPR) has already been directed to ensure that all marketers comply with this directive and DPR is also to ensure that all lubricant dispensing tanks are disposed of appropriately. He equally revealed that any marketer who fails to comply will be made to face the full wrath of the law. 
 
Speaking further, the minister explained that the directives were in the nation’s interest as it had become necessary to protect equipment and engines in machineries against unwholesome handling of base oils which serve as raw materials for lubricant production. He opined that the adulteration of lubricants lead to damage to machinery and equipment.
 
Dr. Lukman therefore said it was imperative for Government to address these issues in order to safeguard the lifespan of engines and equipment which are used for production of the nation’s wealth. He also noted that the unwholesome disposal of these lubricants by some retailers posed danger to the environment and ultimately could endanger human health in the long run.
 
The Ministerial Committee made up of representatives from Department of Petroleum Resources (DPR), Standard Organization of Nigeria (SON), major and independent lubricant manufacturers, Automotive Technicians association and the lubricants marketers with a view to provide a comprehensive and holistic solution that will move the market forward. In line with its mandate, the Committee would soon embark on an awareness campaign to educate the public on the expected changes in the market.
 
The Minister who also addressed First Nigerian Summit on Liquefied Petroleum Gas (cooking gas) at another forum in Abuja disclosed that the Federal Government has fashioned out a new strategy for the development of the LPG market in the country because the domestic gas utilization in Nigeria, particularly the LPG remains abysmally low.
 
Dr. Lukman revealed that the new initiative is premised on the primary objective of incorporating LPG in the nation’s energy mix with a view to using it as the main driver of our new deregulation policy in the downstream sector. The new plan according to him will result in growing LPG consumption in the country from the current low level of about 80,000 MT per annum to over 5,000,000 (five million) MT per annum in the next five years.
 
In his presentation, Dr. Lukman noted that LPG is an important component of the energy mix of many countries in the world. In Nigeria, particularly in the late eighties/early nineties, demand grew rapidly from 34,000 metric tonnes in 1980 to about 129,000 metric tonnes in 1990. Subsequent years however witnessed significant decline at an average of about 13% per annum, reaching a trough of 43,000 metric tonnes currently. LPG is used mostly in Nigeria as a domestic cooking fuel. The per capita annual consumption for the country is put as 0.5kg which is believed to be the lowest in the West African sub-region, which has an average of 3.7kg. The low per capita LPG consumption in Nigeria, reputed as one of the lowest in Africa, is an issue of great concerns to the Government.
 
The Minister stated that Government’s efforts at addressing the poor situation had necessitated the need to provide the substitution of gasoline and household kerosene with AUTO LPG and HOUSEHOLD LPG respectively and eventually for power generation. In his reasoning, the present scenario where there is over reliance on one or two products in the energy mix had deprived Nigerians of the immense benefits latent in the production of the nation’s hydrocarbon.
 
In achieving the set target for the growth of the LPG market, the Federal Government, the Minister said, has directed that a percentage of export of LPG production from the NLNG, NNPC/Chevron and NNPC/ExxonMobil joint venture NGL Plant in Bonny River Terminal be set aside for the domestic market. This should be in addition to other sources of LPG production through the local refineries, large scale gas extraction plants and accelerated gas extraction projects targeting stranded fields.
 
The Minister also disclosed that from the marketers’ side, Government would introduce a new set of incentives which would target infrastructural development expected to encourage private investments in storage terminals, jetties, refining plants and local manufacture of LPG cylinders and accessories. This, he said, should boost the local consumption of cooking gas in the country. He therefore enjoined private investors to utilize the opportunities being offered by Government through this news strategy to grow the LPG market.

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