Autogas: LPG cheaper than petrol, diesel — Expert

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By Udeme Akpan

As consumers groan under the weight of high petrol prices, an expert has urged fuel consumers to convert to gas, arguing that it is cheaper than petrol and diesel.

In an interview with Vanguard, the Managing Director, Banner Energy, Mr Nuhu Yakubu, who noted that the Federal Government’s policy has impacted positively on the gas sector, said: “The policy is aimed at enthroning gas as preferred energy for the domestic economy because it’s comparatively cheaper.

“While a litre of government subsidised petrol, under extant price regime, actually retails for between N165 and N200 per litre, depending on the part of the country, the average deregulated retail price per litre of LPG delivered to Abuja – FCT falls between N100/litre for propane specification to N195/pitre for butane specification.

“The cheaper of the two, being Propane spec LPG is the industry-approved standard for Autogas in Nigeria, which portends huge savings for families and businesses.

“Autogas use with deep market penetration with a reasonable switch from PMS and AGO will save Nigeria huge foreign exchange spend on fuel importation; expand Nigeria’s domestic energy mix with improved accessibility for LPG as a cleaner and cheaper energy source with multiple applicable uses.

“This will in great measure help the consumers especially the low-income Nigerian families with their fast-eroding purchasing power in an increasingly difficult economic environment.

“Apart from savings on the unit price per litre or kg of gas, there is also much savings on gas, with respect to engine servicing and overall maintenance cost, compared to petrol or diesel engine maintenance cost.

“And it is environment-friendlier than petrol and diesel, in terms of greenhouse gas emissions. Autogas use will help trigger the much-needed demand intensive use of gas, with the multiplier effect on improved in-country production and supply sources, with the attendant reduction in gas flaring, with a marked increase in foreign direct investments in LPG production plants, trading and distribution infrastructure and equipment manufacturing in Nigeria, which has been on the decline in recent years.

“LPG is a broad-spectrum substitute fuel for petrol, kerosene, and diesel, and if its broader applications and deeper penetration are properly encouraged, it will reduce demand pressure on the foreign currencies, including the USD, for financing importation of petroleum products, which currently accounts for over 70% of Nigeria’s foreign exchange demand.

“Reduction in USD demand will apply upward pressure to strengthen the value of the Naira against major international currencies.”

Yakubu, who confirmed that his company started converting PMS and AGO automobiles to LPG, said: “The project which is essentially aimed at converting vehicles nominated solely by Nigerian National Petroleum Corporation, NNPC, which includes NNPC vehicles, Ministry of Petroleum Resources, selected mass transporters, Labour Unions, the AKK project vehicles, among others, as received according to the discretion of NNPC, through its retail subsidiary, NNPC Retail Limited.”

Already, he stated: “Banner Energy Limited has built the most and currently operates the largest network of LPG Autogas retail filling infrastructure in Nigeria, operated as BannerGas.

“The role of BannerGas is to support the Federal Government of Nigeria in achieving its objective of ensuring smooth and quick transition to Autogas use by a critical mass of road users, by the expansion of its franchise network of LPG retail filling plants network, as the faster deployment option to achieve improved accessibility and market penetration.

“BannerGas has recently completed construction of Autogas filling plants for NNPC to flag off the Federal Government’s Autogas policy.

“With the success of the launch, BannerGas is furthering its collaboration with NNPC for a vehicle conversion to use Autogas. The exercise which is being conducted in phases is currently on-going in Abuja, where young technicians are being taught in batches to acquire special skills on Autogas conversion.

“The plan is to extend this by expansion to states of the federation, where plans are on-going to set up Autogas conversion centres.”

“BannerGas has also concluded plans to assemble Autogas vehicle conversion kits in Nigeria, in collaboration with its European manufacturing partners.

“Evidenced by its Autogas retail network commercial roll out since 2009, Banner Energy has played ahead of the curve in actualising its vision of being the market leader for Autogas in Nigeria.

“In spite of the very slow evolving and difficult market circumstances, it has remained focused to reap the benefits of this government’s policy on Autogas. It is a typical case of opportunity meeting us working.”

On the company’s capacity, he said: “BannerGas continues to grow its business portfolio, with unique product offerings, in energy and power.

“It has developed and matured opportunities in the gas value chain, which includes LPG retail, bulk trading, and distribution infrastructure.

“The company has built over 60 LPG Autogas and cooking gas filling plants of various capacities, and owns and operates over 40 plants that are currently operating under the BannerGas franchise across 16 states in all the geopolitical regions of Nigeria.

“It owns and manages a fleet of LPG delivery road tankers, for efficient gas deliveries.

“Banner Energy Ltd has obtained Approval to Construct, as well as complete all pre-development activities for the construction of its 13,000MT LPG coastal storage, with ship loading and offloading terminal at Ikot-Abasi, in Akwa-Ibom State. It is now nearing financial close to enable construction commencement.

“Banner Energy Ltd has obtained On-Grid Electricity and eligible customer generation licence as well as completed all pre-development activities, also at Ikot-Abasi, in Akwa Ibom State.

“The power plant as with other Banner Energy’s power generation businesses is designed on basis of dual-fuel philosophy; ie natural gas as primary fuel and LPG as the secondary fuel.

“Banner Energy Ltd. continues to develop other LPG and natural gas demand-intensive applications, including real estate reticulation, industrial and agricultural processing. Banner Energy Ltd believes in human capital development and has demonstrated this over the years, by ensuring continuous in-country and overseas technical training for its engineers and technicians. BannerGas has over the years sponsored its staff for training in Germany, Turkey, Poland and other European countries to improve and or acquire technical expertise in LPG and gas technologies.

“Similar gesture has been extended to personnel of industry regulators to also keep them abreast with new trends in gas technologies.

“Banner Energy has maintained its principles of impacting high skills knowledge till date, by its on-going training of young technicians on Autogas conversion kits installation, to convert petrol vehicles into hybrid engines to run on gas and petrol with the flip of a switch.

“This training is free of charge, and the company aims to be able to train at least 150 young Nigerian technicians in LPG Autogas conversion before the end of 2021.”

Mr Yakubu, who noted that some issues and problems abound, stated: “Issues largely border on competing subsidies on petrol, which is a major disincentive for Autogas potential users, dedicating LPG retail infrastructure for Autogas LPG fuel specification, in the absence of a robust Autogas demand market, relatively increasing cost of auto conversion kits, since prices are tied to the major foreign exchange currencies, funding gaps for development of LPG Autogas bulk and retail trading infrastructure nationwide, to position ahead of the market potentials.”

Mr Yakubu, who called on the government to fully deregulate the downstream sector, also urged it to fund the commercial roll out and distribution of LPG Autogas conversion kits, for all government vehicles and mass transport vehicles, as well as vehicles belonging to oil and gas operators.

Vanguard News Nigeria

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