OBG EXPLORES SUBSIDIES AND IMPACT OF LOWER OIL PRICES IN NIGERIA

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New role for liquefied petroleum gas considered in Oxford Business Group’s publication

Nigeria, January 2016: The major part that liquefied petroleum gas (LPG) could play in helping Nigeria to reduce fossil fuel emissions is one of many topics explored by Oxford Business Group (OBG) in its latest economic report on the country.

 Speaking to OBG as part of the Group’s research for The Report: Nigeria 2016, Dayo Adeshina, the president of the Nigeria Liquefied Petroleum Gas Association (NLPGA), said much more could be done to “actively promote cleaner, safer LPG” at a time when combating climate change was high on the global agenda.

“Nigeria is one of the largest producers of LPG in Africa, yet its per-capita consumption is one of the lowest on the continent,” he said. “While annual production stands at 4m tonnes, Nigeria’s total yearly consumption is just 350,000 tonnes.”

The NLPGA’s deputy president, Nuhu Yakubu, who was also interviewed by OBG, added that aside from having the potential to assist the government as it targets bringing down fossil fuel emissions by 20% within five years, LPG was also “tremendously versatile”. “LPG can be used for cooking, auto gas, heating, cooling and power generation,” he said. “With the right policies in place, the domestic LPG industry could really take off.”

With speculation mounting that President Muhammadu Buhari’s government plans to overhaul Nigeria’s subsidy system this year against a backdrop of lower global oil prices, OBG’s report will consider whether subsidies for kerosene, which cost the government an estimated N1.7trn, could be among those removed. Oil is by the far the biggest contributor to Nigeria’s economy, accounting for two thirds of the country’s revenue and 90% of foreign exchange earnings. However, plummeting prices have taken their toll on government income, giving weight to the government’s drive to diversify the economy.

These and many other topical issues will be analysed in detail in The Report: Nigeria 2016, which is due to be published in the coming months. The publication will contain a detailed, sector-by-sector guide for investors, alongside contributions from leading personalities.

“We believe LPG has significant potential in Nigeria and that with the right enabling environment it can make a strong contribution to the national effort to reduce carbon emissions,” said Izabela Kruk, Country Director for OBG in Nigeria.

The Report: Nigeria 2016 will be a vital guide to the many facets of the country, including its macroeconomics, infrastructure, banking and other sectoral developments. Oxford Business Group’s publication will be produced in partnership with the Nigerian Economic Summit Group and the law firm Ajumogobia and Okeke and will be available in print or online.

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