Petroleum products are among the most valuable natural resources abundantly available in our country. Nigerians and people everywhere use petroleum products as a fuel in their automobiles, generating sets, industrial plants and for cooking purposes, thus making petroleum products an essential commodity that is needed for the daily operations of individual, industrial and national activities.
Undoubtedly a vast investment potential exists in the domestic liquefied petroleum gas filling sub-sector of the Oil & Gas Industry in Nigeria. A large proportion of the middle and upper socio-economic class of people depend on gas for cooking purposes. So are industries, government establishments, hotels, hospitals, restaurants, bakeries e.t.c
A statistic for the country some years ago showed that a mere 5% of the consumption potentials of liquefied petroleum gas (LPG) were attained. It is therefore evident that we have a long way to saturate the Nigeria LPG Market if it were to be fully developed because if a domestic consumer is sure of getting liquefied petroleum gas (LPG) when and where he needs it at the right price, he would most willingly convert from firewood, coal or kerosene to liquefied petroleum gas (LPG).
With huge gas reserves of 185 trillion cubic feet and the Nigerian government’s strong commitment to developing the gas industry through the Gas Master Plan, there are a lot of emerging opportunities for investors in the sub- sector.
With less than one kilogram me per capita consumption, Nigeria ranks among the lowest liquefied petroleum gas consuming states in Africa despite its huge gas resources.
Today, Nigeria consumes about 110, 000MT per annum and we have about 130 liquefied petroleum gas (LPG) plants and 7,000 retailing outlets. If we can move the consumption level up to 750,000MT per annum, we expect to have about 250 liquefied petroleum gas (LPG) plants and 74,970 retailing outlets.
More succinctly, a captive market of over 165 million people makes investment in liquefied petroleum gas (LPG) bottling plant viable since one of the challenges the Federal Government as well as liquefied petroleum gas (LPG) operators are forced to grapple with is how to popularize the use of cooking gas in Nigeria.
Following the unprecedented demand for liquefied petroleum gas (LPG) in Nigeria and attendant scarcity of the product which has resulted in sharp and arbitrary price increases, the distribution of gas products has been deregulated. Consequently, this has opened up a lot of opportunities in the industry and one of such opportunities is the production of liquefied petroleum gas (LPG) cylinder in Nigeria.
Local gas cylinder manufacturing scheme is supported by Section 53 of the Nigerian Content Act, which prohibits the importation of welded steel products.
About 2.5 mn cylinders are estimated to be in the country and over 70% of this volume are imported.
LPG Cylinder is an essential item for filling liquefied petroleum gas used for cooling purpose. The body of LPG cylinder is deep drawn in two pieces then these are welded together to make a compact unit without any leak and defect etc. LPG cylinders are in use in 3 KG, 6.25 KG, 12.5 KG and 50 KG capacities. To ascertain the quality, safety and performance certain regulations are applicable such as NIS 69: 2006 standardization.
The policy on promotion of local content in key sectors of the economy may soon result in a ban on importation of gas cylinders into the country. Moves for the ban are now being initiated by the Nigerian Content Development and Monitoring Board (NCDMB) in collaboration with major stakeholders in the oil and gas sector, including the Nigerian National Petroleum Corporation (NNPC), Oando Group and Sahara Energy.
At present, a survey has found that only five percent of an estimated 26 million Nigerian families use cooking gas. This initiative, when it comes on stream, will encourage more families to use gas and gas cylinders. About 2.5 million cylinders are currently estimated to be in the country.
The demand and supply balance is in favour of demand which will continue to outstrip supply. Liquefied petroleum gas (LPG) is a good substitute for kerosene in homes. Its clean burning properties in a properly twined engine, give reduced exhaust emissions, extended lubricant and spark giving rise to the demand of Liquefied petroleum gas (LPG) cylinders.
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At Foraminifera Market Research {www.foramfera.com}, we provide bespoke and up to date market research reports for start-ups and those already in business.
Our reports are designed to assist start-ups to understand the legal and financial requirements of starting the business, the market trends vis-a-vis demand and supply, competition, risk identification and mitigation strategies.
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Report Title: ESTABLISHING A LIQUEFIED PETROLEUM GAS {LPG} FILLING PLANT IN NIGERIA: THE FEASIBILITY REPORT.
Report Code: OILDEALS01
Report Title: LIQUEFIED PETROLEUM GAS {LPG} REFILLING AND DISTRIBUTION IN NIGERIA; THE FEASIBILITY REPORT.
Report Code: FORA/01/2015/LPGRETAILING/03990-563-3
Report Title: SETTING UP A LIQUEFIED PETROLEUM GAS ({LPG) SKID FILLING PLANT IN NIGERIA;THE PRE-FEASIBILITY REPORT.
Report Code: FORA/01/2015/SKIDMOUNTEDLPGPLANT/0997740-03
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