2.5 Ton LPG Skid Plant vs LPG Retail Outlet (Using 50kg cylinders)

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• Author: Muyiwa Ige(LPG Stakeholder and Consultant)

LPG Retail Outlet (Using 50kg cylinders)- Advantages

• ·         In most cases, the landing cost of 50kg of gas is lower than the landing cost of the equivalent of 50kg of gas for a 2.5 Ton LPG Skid Plant.

  ·         It doesn’t require much space. All you need is a 4-8 square feet shop or container, depending on the number of cylinders in your possession.

  ·         The Department of Petroleum Resources and Fire Service fees are low compared to the fees for a 2.5 Ton LPG Skid Plant

  ·         The set-up cost is low compared to a 2.5 Ton LPG Skid plant. For instance, if you are starting up with ten 50kg cylinders, you will need about N500,000 to commence on a sound footing.

  ·         An LPG retail outlet that has at least ten 50kg cylinders will not be running out of stock. Whenever five 50kg cylinders have been exhausted, they can be taken to the LPG plant for a refill.

  ·         The cost of operating a LPG retail outlet is relatively low. Retail outlets that employ manual dispensing of gas without a pump have no need for electricity or power generators. While LPG outlets with small pump usually require small power generators that consume little amounts of fuel, hence reducing the cost of operation.

  ·         Relocating an LPG retail outlet from one location to another is easy and not expensive, as all one needs to do is to load all the cylinders, filling scale and accessories in a pick-up van.

LPG Retail Outlet (Using 50kg cylinders)- Disadvantages

• ·         For LPG retailers using manual dispensing of gas, the process is slow. For retailers using pumps, the refilling process is actually faster but not as fast as in a 2.5 Ton LPG Skid plant that usually has a higher capacity LPG pump.

  ·         The process of loading and off-loading 50kg cylinders to and from the gas plant is stressful.

  ·         The process of refilling gas itself, which involves the turning of the supply 50kg cylinder upside down and the intermittent venting of vapor involves some stress.

  ·         Some LPG users /customers have a bias against LPG retail outlets; with an erroneous belief that they usually under-dispense LPG.

2.5 Ton LPG Skid Plant- Advantages

• ·         The process of refilling gas is very fast.

  ·         There’s little stress involved in the gas refilling process because the LPG pump does most of the work.

  ·         The procurement of gas is hassle-free. LPG bobtails (supply trucks) bring the product directly to the 2.5 Ton LPG Skid location and dispense gas into the tank.

  ·         Some LPG users/customers have a preference for LPG Plants (2.5 Ton LPG Skid Plants inclusive) as a result of their belief that accurate refilling of gas can only be guaranteed at LPG Plants.

2.5 Ton LPG Skid Plant- Disadvantages

• ·         The set up cost is high relative to an LPG retail outlet with the same storage capacity

  ·         Set up cost of a 2.5 Ton LPG Skid Plant equipped with a standard LPG Pump and Dispenser(civil Works inclusive) – N3,000,000

  -          Set-up cost of an LPG Retail outlet with a 2.5 Ton Storage capacity(fifty 50kg cylinders) – N1,800,000

  ·         With the new DPR guideline, the space requirement of at least 11/2 plots for a LPG storage tank establishment is stringent and expensive to implement

  ·         DPR, Fire Service, State Interim Permit, Police Permit and documents such as Environmental Impact Assessment and engineering drawings can gulp up to N1,500,000 and is therefore very high compared to the corresponding fees for an LPG retail outlet.

  ·         A 2.5 Ton LPG Skid plant can easily run out of stock because LPG supply trucks sometimes take longer than the expected time to make their deliveries.

  ·         Relocating a 2.5 Ton LPG Skid Plant from one location to the other is expensive and cumbersome

  ·         Power generators which consume more fuel are used in a 2.5 Ton LPG Skid plant and the annual dues of government agencies/unions are higher, which makes the cost of operation higher than LPG retail outlets.