Nigeria imports nearly 50% of its domestic gas in first quarter of 2019 despite having world's ninth largest reserves

NIGERIA imported 146.14m litres of gas representing 47% of total national consumption during the first three months of 2019 from the US and five other countries despite the nation having the world's ninth largest reserves.

Across Nigeria's Niger Delta, liquefied petroleum gas (LPG) is being flared, wasting what should be a tapped and stored resource and polluting the environment in the process. While the nation burns away gas that could easily be used domestically, it is having to import LPG from India, the US, Trinidad and Tobago, Algeria, Argentina, and Equatorial Guinea to meet local demand.

According to the National Bureau of Statistics, the US accounted for 46% (67.10m litres) of Nigeria’s LPG imports during the period. This is despite the fact that Nigeria is home to the largest natural gas reserves in Africa and the ninth largest in the world

Nigeria imported 61.39m litres of LPG in January, while 33.22m litres were produced locally. Then, the country imported 26.60m and 58.15m litres in February and March respectively while 55.72m and 75.77m litres were produced locally in February and March respectively.

America exported 19.29m, 7.26m litres and 40.55m litres of LPG to Nigeria in January, February and March respectively. According to the Nigerian National Petroleum Corporation (NNPC), the country has around 202trn cubic feet of proven gas reserves plus about 600trn cubic feet of unproven gas reserves.

Saidu Mohammed, the NNPC's chief operating officer, gas and power, said: “Out of 8.5bscfd of natural gas production in Nigeria, only 18% produced is being utilised by the domestic market. A large percentage of the gas produced is used for the export market, with re-injection being 32% and flared gas standing at 7%."

Last month, the Nigerian Association of Liquefied Petroleum Gas Marketers commended the federal government over the removal of value added tax on locally-produced LPG. Marketers and other industry stakeholders had over the years complained about the VAT being charged on locally sourced LPG, saying the tax made the cost high, compared with imported cooking gas.

Nosa Ogieva-Okunbor, the president of the association, said: “The clamour for VAT removal from domestically produced liquefied petroleum gas has been a perennial concern to members of our association. The good news received by our association and the LPG industry is that the federal government has finally signed the approval of VAT removal on LPG and gazetted same, which makes it an official pronouncement.”

He said the increased awareness of LPG usage had seen consumption in Nigeria grow from 50,000 tonnes in 2007 to over 600,000 tonnes in 2018, with more indigenous investments in LPG bottling plants.