February 25, 2024

Nigeria, others to save over $774b through LPG adoption amid rising costs


By achieving 50 per cent market penetration, Nigeria and other African countries can save more than $774 billion by intensifying the adoption of Liquefied Petroleum Gas (LPG) as a cleaner cooking fuel alternative by 2030.

Insisting that adoption remained key to the achievement of the United Nations Sustainable Development Goal number seven of universal access to energy, the experts who gathered at the 15th anniversary of the African Refiners and Distributions Association (ARDA) yearly conference, noted that the total cost of continuous use of biomass, charcoal and other pollutants as cooking fuels rather than cleaner alternatives like LPG amounted to over $774 billion.

Despite the rising costs of LPG locally, experts added that continuous use of dirty fuels could lead to premature deaths, increased childhood and adult illnesses, attendant environmental issues and strain on the healthcare system.

LPG serves as one of the best near-term alternatives to reduce Africa’s carbon footprint and switching customers on the continent to utilise it for up to half their fuel needs over the next decade could enable Africans to enjoy these huge savings.

Speaking about the role of LPG in Africa’s energy transition at the event, Executive Director at Sahara Group, Temitope Shonubi said converting just 30 per cent of Africa’s vehicle fleet to run on LPG would result in $3 billion yearly fuel-cost savings and approximately 40 billion grams in CO2 emission reductions.

Shonubi also noted that the indirect cost savings (from health and infrastructure) would exceed $15 billion yearly.

He further disclosed that only six African nations have combined LPG storage capacity greater than 50,000 metric tonnes (MTs), stressing that such lack of large-scale infrastructure would lead to uneconomic cargo sizes thereby resulting in increased landed LPG costs.

Stating that Africa consumes only four per cent of global LPG demand, Shonubi noted that affordability, purchasing power, limited infrastructure, safety concerns as well as the cost of cheaper alternatives have accounted for low LPG penetration on the continent.

To grow the continent’s LPG consumption, Shonubi stated that strategies and policies must be implemented to promote investments in LPG storage and distribution infrastructure, encourage financing schemes (e.g. pay-as-you-use) to make LPG more affordable. He said the strategies must also target environmental impact rewards programmes for switching to LPG, enforcement of safe LPG practices and education of the public to counter negative perceptions of LPG use.

Executive Secretary of ARDA, Anibor Kragha and other experts had earlier warned of imminent danger if Africa fails to quickly adopt modern clean energy as over 850 million Africans still depend on solid fuels (biomass) for cooking.

According to him, without strategic efforts towards energy transition, especially replacement of solid cooking fuels like biomass and charcoal with cleaner alternatives like LPG, over 600,000 Africans yearly will continue to die prematurely due to household air pollution.
Kragha insisted that there should be no going back on the implementation of an actionable roadmap that will effectively transition Africa’s current primary energy mix towards a more sustainable, lower carbon footprint.

Chairman, The Global LPG Partnership, Kimball Chen, who also spoke at the event, said LPG markets are already established in Africa with downstream marketers/investors in place and interested in the growth of the sector.

While adding that functional LPG policies, regulations, standards and market models are being widely implemented across Africa, Chen said global development institutions and multilateral banks continue to hold back on scaling up support for LPG because it is still considered a fossil fuel.

Chen stated: “Governments urgently seek LPG sector growth, especially to meet clean cooking needs of growing, urbanizing populations”, but noted that to accomplish this a combination of private sector investment in the LPG sector and support from global development institutions and multilateral banks for green BioLPG projects would be needed.

According to him, capital markets and major private sector companies are moving forward on an initial wave of BioLPG production projects as bioLPG is produced from natural sources such as agricultural residue and municipal waste while having the same clean energy benefits as traditional LPG.

“Blending of BioLPG into African refinery LPG and imported fossil LPG offers a viable path for continued investment and growth of the LPG sector as the BioLPG proportion of LPG production and consumption grows. ARDA members can benefit from shared research and development into BioLPG technology that can be implemented at scale in the next ten years,” Chen noted.

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