#Nigeria: Natural Gas v Kerosene

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We should be quite thankful that we don’t live in the sixties anymore because back then, other than the fact that there was no internet, all people practically heard about back then was “revolution”, “revolt”, “unrest”, “protest”, “WAR”, etc. I understand that a certain set of people that have been collectively tagged as “baby boomers” bear some marked fondness for that particular decade. Some historians bearing testament to the general atmosphere of that era, described it as having “something in the air” and being “electric”, like a pregnant pause; that bit of deafening silence that heralds the approaching rumbles of marching boots and galloping hooves; the rising clouds of dust set against the golden orange hue of a rising sun while a horn in the opposing distance blares out that familiar cry of “war!” to you a soldier in a troop that is about to be surrounded and probably even dead in a little while. This was the sixties as far as I am concerned, I didn’t live in it but this is what history says it was and history sometimes lies but not that often. Happily, it was also when our dear country gained her independence and started out on her own steady decline into the system we see today and it was also around this period we also began to flare gas as a waste product of oil refining

Nigeria has recently shown a recognition of the harmful effects of gas flaring in line with the recommendations from the Paris Agreement on curbing Climate Change. Unfortunately, this is an act it has been kept up for decades even though natural gas as a commercial commodity is substantially of value to domestic, industrial and commercial use and admittedly, the commercial value of it makes up part of the factors that aided the dawn of this epiphany.

Nigeria has been estimated to possess natural gas reserves of around four trillion cubic feet (USGS, 2017), this is enough energy to sustain the population for a few lifetimes if used properly. Nigerians however have the most use for natural gas as a source of domestic fuel for cooking and more recently for domestic electricity generation by retrofitting petrol generators with natural gas combustion apparatuses. On a larger scale, the country itself uses most of its gas demand on electricity generation as well although the supply in this case has been complicated by legislative policy and pricing discrepancies which have most unfortunately reflected in the sorry state of the nation’s electricity supply. See here

Weighing the cost against the benefits of the investment of trying to build a comprehensive natural gas network to service all required needs, some of the first issues that come to mind for comparability would be the use of kerosene.

53,000 (daily consumption in barrels [as at 2012]) x 159 (converting barrels to litres) = 8,427,000 (litres) x N180 (approx. average price of kerosene per litre) = 1,516,860,000 (daily expenditure on kerosene) x 365 (days in a year) = N553,653,900,000

The little bit of math above quite simply shows a credible estimate on just how much Nigeria spends annually on kerosene and the total figure adds up to more than a half trillion naira. The most popular use of kerosene in Nigeria is as domestic fuel and ideally this is where the focus should lie if the shift that is eventually going to increase the local consumption of natural gas is going to be successfully implemented.

Kerosene as the primary source of domestic fuel in Nigerian homes is accounted for by more than 50% of urban homes and around 11% in rural settlements with LPG taking more shares of the remainder than biomass in the urban setting while biomass (firewood, etc.) almost entirely dominating on the remainder on the rural front (UK Department of Public Health, 2008; Index Mundi, 2017). It might be interesting to note that as at 2008 when the nation recorded the prevalence figures stated above (>50% urban; >11% rural), Nigeria recorded a daily consumption value of around 17,000 barrels of Kerosene, this may be compared with 2012 where the daily consumption stood at 53,000; an increase greater than threefold. It might be difficult to draw viable conclusions presently due to a lack of definitive data, however, one could argue that the prevalent use of kerosene on the urban and rural fronts have seen substantial increments. Using conventional macroeconomic determinants, the population of Nigeria’s population living below poverty lines stands at 127.4 million, due to the cost of purchasing a gas powered domestic cooking set compared with kerosene and biomass, it is understandable that the majority of kerosene users lie within this classification. Considering the population of children within this group to be around half of the entire figure and using the other half to make our deductions, we might begin by giving a compact gas stove (5 kg) to these 50-60 million people at the expense of the government at around N6,000 per unit to start them off as gas users. A household of four to six may use around 12kg of gas every two to three months at the cost of N3,500. The daily expenditure on domestic cooking fuel in this case is around N40 daily remembering here that a litre of kerosene which lasts for a day or two at most still remains almost N200. The savings in this case are immediately obvious and while an investment sum of N360bn does come off as a lot, the government who sponsored the process could see itself make this money back through reductions in the public expenditure on kerosene which might drop by up to 70 – 80% (remember this is still more than a half trillion – 70% of this figure is almost N390b; this figure could be saved in literally a year and it is more than the N360bn [at most] needed to fund the project) as well as increased income through taxation on the gas supply chain and adding in efforts to localise the nation’s energy economics by reducing the sale of mostly imported kerosene in favour of locally available natural gas.

Furthermore, the long-term health effects of exposure to kerosene fumes as well as the products of kerosene combustion also add to the reasons why large-scale adoption of natural gas may be a good investment. According to the UK Department of Public Health, effects that range from mild to serious neurological disorders, chronic respiratory disorders and skin diseases like eczema from continuous exposure have been emphatically highlighted.

Better health for the people, more improvements on the local economy; more income for the government; freer cash for savings or spending within the population and the possibility of long-term sustenance of thousands of jobs as we continue to develop the supply chain. Quite obviously, there is a lot to be gained from our adoption of natural gas so why not just do it?

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