Embracing Change: Rungas’ Strategic Shift in Africa’s LPG Market

In recent years, the landscape of the liquefied petroleum gas (LPG) industry in Africa has undergone significant transformation as governments seek ways to provide cleaner energy to households, combat deforestation, and promote public health.

At this year’s Africa Refiners and Distribution Association (ARDA) LPG Forum in Abidjan, Rungas CEO Lanre Runsewe highlighted the company’s strategic priorities and how they align with these broader industry trends.

From Production to Distribution: A New Focus

Traditionally, oil majors and gas companies concentrated on increasing production numbers. However, there is now a marked shift towards the domestication of natural resources by improving supply distribution and expanding market reach. This change is driven by various factors, including government policies and market dynamics. “It’s not just about increasing numbers; you’ve got to expand,” emphasized Lanre Runsewe, reflecting a sentiment shared by many industry leaders.

In Nigeria, this shift has been particularly pronounced over the last decade. The government’s initiatives, such as the “Decade of Gas,” have fostered an environment conducive to investment in local manufacturing and distribution. Rungas has benefited from these policies, receiving support from Nigerian institutions and partners to boost local manufacturing of composite LPG cylinders and enhance downstream operations.

Government Policies: Catalysts for Growth

Government policies have played a crucial role in reshaping Nigeria’s LPG market. Recent measures, such as the removal of VAT on LPG and duties on imports pending local production commencement, have incentivized companies like Rungas to invest in local production capabilities. These policies underscore a commitment to fostering a robust domestic LPG industry. Moreover, regulatory requirements such as the MISTDO certificate (Minimum Industry Safety Training for Downstream Operations) for operating micro-distribution centers ensure that operators adhere to safety standards. “We are ensuring compliance with government policy, which includes obtaining a MISTDO certificate to operate safely,” noted Runsewe. This focus on safety and regulation not only protects consumers but also enhances trust in the market.

Prioritising Convenience for Consumers

A critical insight driving Rungas’ strategy is the consumer’s willingness to pay for convenience. Data collected by the company indicates that ease of access to gas is a significant factor for end-users. This understanding has led Rungas to prioritise last-mile distribution solutions that enhance convenience for consumers.

As shared to regional and global LPG stakeholders in Abidjan this week, the company’s approach includes leveraging micro-distribution centres as hubs for advocacy and education on safety. Collaborations with banks and other stakeholders have facilitated marketing efforts through these centres, further promoting safe and convenient access to LPG.

Looking Ahead: Expanding Horizons

As Rungas continues to navigate Nigeria’s evolving LPG market, its focus remains on expanding distribution networks and enhancing consumer convenience across the continent. The positive momentum generated by government policies and industry advocacy is creating new opportunities for growth and innovation.

Rungas is well-positioned to capitalize on these developments, leading the charge in transforming Africa’s LPG industry. By aligning its strategies with market needs and regulatory frameworks, Rungas is set to play a pivotal role in shaping the future of energy distribution on the continent.