Predictive Models on Viable Options for Liquefied Petroleum Gas LPG Distribution: Case for a Small and Medium Scale Enterprise SME Commodity in Nigeria

Liquefied Petroleum Gas (LPG), a product of natural gas processing is a mixture of hydrocarbon gases mainly propane, butane, butylene and impurities such as Sulphur compounds. The production of LPG depends largely on available natural gas. Fortunately, Nigeria has proven gas reserves of over 189.27 Trillion Cubit Feet (TCF). However, LPG production in the country and its distribution especially in an emerging economy appeared to have limited growth over the last three decades. In this study, a stochastic model is applied to secondary historical and predictive data from 1994 – 2020, essentially on the production, consumption and streamline distribution pattern for the country. Certain assumptions were made including changes in the various stages in the production value chains (production, storage, distribution, pipeline infrastructure, and supply chains in-country.). Linear regression and correlation approaches were adopted using the models which agreed favorably with the plots from established data. It indicated that LPG consumption increases rapidly from 2016 upward following increases in infrastructural surplus, investment and awareness enlightenment initiatives. The results obtained indicated a strong correlation between demand-supply bond driven by market forces in the urban and suburban cities in-country. These indicators are reliable parameters for sustainable strategic planning, policy development and implementation for rapid economic recovery.