Business Hilights

Tracking Nigeria's Headline Business News Online

Gas Cylinders

Availability may frustrate planned returnable cooking gas cylinder policy—Expert

Ad 2
Ad 3

Lagos energy analyst, Mr Seun Akinlade has raised objection to the plan by the Federal Government to come up with a policy that will transfer ownership of cylinders from consumers to only marketers.
However, Business Hilights gathered that Nigeria remains the only West African country yet to adopt the gas cylinder returnable model of sales.
In an interview with our Correspondent, he argued that “Before such a policy will be implemented, government must first establish that there had been enough licensed dealers with good number of not just cylinders, but those that meets standard conditions.
“For me, I will advise the government to mandate marketers to first phase out iron cylinders for steel products because a lot of iron cylinders am seeing are rusted and very susceptible to explosion no matter the level of repainting done on them.
“Again, it will take time to end roadside vendors who are usually closer to residents unless government will see how it can upgrade the roadside vendors into their mainstream supply chain ahead of the scheme takeoff,” Akinlade noted.
Recall that a new policy that will outlaw the sale Liquefied Petroleum Gas (LPG) or cooking gas by the roadside vendors and transfers full ownership of the cylinders from consumers to only marketers licensed by the Department of Petroleum Resources (DPR) is being worked out by the Ministry of Petroleum Resources.
Only recently, a Senior Technical Adviser Downstream and Infrastructure to the Minister of State Petroleum Resources, Brenda Ataga explained that the new policy gives complete ownership of the LPG cylinder to the dealers and distributors so as to address safety concerns.
In her remarks at a recent stakeholders’ forum on LPG penetration in Abuja, Ataga noted further that the new policy will further sanitise the market and rid it of people without strong knowledge of gas safety management standards.
On availability of quality cylinders, Ataga revealed that the federal government had reached an agreement with two original cylinder manufacturers to deliver 600,000 cylinders to LPG distributors on credit, with a pre-payment period of 18 months.
According to her, government is already planning for about 386,000 micro distribution centres across the country that would drive the initiative even as it has kicked off pilot scheme of the LPG Micro Distribution Centres with the Nigeria Army barracks and cantonments in the first phase.
Explaining more, Ataga revealed that government has directed all LPG skid operators to immediately convert their outlets to micro distribution centres or risk sanctions, disclosing that within weeks, government will commence total clampdown on illegal roadside LPG dealers.
Ataga said “If you are caught selling on the streets without the proper equipment and licence there is a jail term attached to it (the offence). It is severe now because we are talking about loss of lives here. You are liable for murder as far as we are concerned.”
“The clampdown will be done area by area. Areas where we have done full conversion, no resale of gas without licences will be allowed.
“You would fill them at the refill plant that would be tied to you; and you would exchange it with your customers, because you know your customers already. Your customers pay for only the content, while you own the cylinders and control the management of those cylinders.
“The reason is for us to be able to, at any point in time, discern and discover cylinders that are bad; cylinders that need re-certification and cylinders that need to be removed from circulation. We put that onus on distributors going forward, to support the safe and standard method of selling LPG.”

Business Hilights is an online news channel conceptualized and structured to report and track on a daily basis; latest developments in critical business sectors to serve as a one stop news gateway for governments, foreign and indigenous investors.