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\u25bc<\/p>\n\u25bc<\/p>\n
Dangote<\/p>\n
By Amah
\nKindly share:<\/p>\n
President of the Dangote Group, Alhaji Aliko Dangote, has announced plans to reduce the price of Liquefied Petroleum Gas, also known as cooking gas. He also promised to start direct sales of the product to consumers should the existing distributors fail to allow the price crash in cooking gas.<\/p>\n
However, operators in the sector have disagreed with the plan, saying the businessman was planning to monopolise the LPG sector. They kicked against the move on Monday, as the dealers expressed fear of a possible monopoly.<\/p>\n
Speaking during a recent tour of his refinery by some local and foreign guests, Dangote stressed that the current price of cooking gas is expensive and not affordable for the common people who depend on firewood for cooking.<\/p>\n
He disclosed that the refinery now produces 22,000 tonnes of LPG daily and it is ramping up production for distribution into the Nigerian market, especially as Nigerians move towards the use of gas for cooking.<\/p>\n
Speaking to members of the Lagos Business School CGEO Africa, at the refinery in Lekki, Dangote said, \u201cThe one that we didn\u2019t write, which you must have seen, is LPG. Currently, we do LPG of about 22,000 tonnes per day. You know Nigeria is gradually moving to the usage of LPG. But I believe it is expensive, but right now we\u2019re trying to bring down the price and make it cheaper.\u201d<\/p>\n
Dangote warned that \u201cif the distributors are not trying to bring it down, we\u2019ll go directly and sell to the consumers, so that people will now transit from firewood or kerosene to LPG for cooking.\u201d<\/p>\n
The PUNCH recalls that Dangote plans to start the direct distribution of petrol, diesel, and aviation fuel to marketers nationwide in August, with 4,000 CNG-powered buses procured for the exercise.<\/p>\n
Currently, the price of cooking hovers around N1,000 and N1,300 per kilogramme. Dangote said this would be brought down to ensure affordability.<\/p>\n
Operators kick<\/p>\n
It appears operators in the LPG market are not pleased with Dangote\u2019s plan to disrupt the sector.<\/p>\n
Speaking in an interview with our correspondent, the former Chairman of the LPG and Natural Gas Downstream Group of the Lagos Chamber of Commerce and Industry, Godwin Okoduwa, described the plan as monopolistic.<\/p>\n
Okoduwa expressed concern that the billionaire businessman should recognise the fact that some investors grew the market from 70,000 metric tonnes in 2007 to over 1 million metric tonnes in 2022, saying collaboration is the way to go.<\/p>\n
\u201cI think it\u2019s monopolistic. I think a market should be protected to encourage growth. The LPG industry in Nigeria grew from 70,000 metric tonnes in 2007 to over 1.3 million tonnes in 2022. That was done by collaboration \u2014 collaboration with the Federal Government, the NLNG, and offtakers. Everything was done in collaboration. It grew from 70,000 to 250 to 800, and now over a million,\u201d Okoduwa said.<\/p>\n
He stressed that growth cannot be achieved through a monopoly but through collaboration. \u201cToday, we are just under 5kg or 6kg per capita consumption in terms of LPG. Other countries are doing much more. South Africa is doing double digits, Morocco and Tunisia are doing double digits. We can do much more.<\/p>\n
\u201cSo, we should, as an industry and as a country, focus on how to grow the LPG industry and not allow someone (to frustrate the players). Yes, he has invested; yes, it\u2019s a capital economy, but he should not be allowed to frustrate the players.<\/p>\n
\u201cThere are people who have spent money, spent resources, even business and development, and someone just comes in to reap from the work that has been done. I\u2019m sure he wouldn\u2019t have built if there had not been an existing market. The work has been done, he should respect the market and let us grow. It shouldn\u2019t be a zero-sum strategy. It should be collaborative,\u201d he said.<\/p>\n
In his recommendation, the gas expert said that though Dangote has the upper hand, he should embrace collaboration.<\/p>\n
\u201cMy advice to him is that the pie can be bigger. The Nigerian market is about 1.3 million tonnes. The Nigerian LPG market can be 5 million tonnes. He should work towards collaboration rather than competition, because at the end of the day, everybody benefits,\u201d he added.<\/p>\n
Told that Dangote\u2019s major concern is to bring the price of cooking gas to a rate where everybody can afford it and stop cooking with firewood, Okoduwa retorted, \u201cI have news for him. He should go to the Northeast, where you have the least consumption of LPG. He should go to the Northeast and start developing the LPG infrastructure there. I think we will tell him thank you for that.\u201d<\/p>\n
Similarly, the Executive Secretary\/Chief Executive Officer, Nigerian Association of Liquefied Petroleum Gas Marketers, Bassey Essien, doubted the possibility of Dangote selling gas directly to consumers or to crash the price.<\/p>\n
\u201cI am saying that it\u2019s unrealistic. What is the position with PMS? Has the refinery been able to sell petrol directly to you and me into our cars at a very cheap rate?\u201d Essien asked.<\/p>\n","protected":false},"excerpt":{"rendered":"
\u25bc Dangote By Amah Kindly share: President of the Dangote Group, Alhaji Aliko Dangote, has announced plans to reduce the…<\/p>\n","protected":false},"author":1,"featured_media":7033,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-7032","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business-economy"],"yoast_head":"\n