Reimagining LPG delivery in Africa: Retailing through IoT

By Caesar Keluro

There are over 22 billion IoT-connected devices on earth and industry research estimates that by 2030 the number of connected devices could reach more than 50 billion. This will impact every aspect of African society. But a common service platform is a key enabler to catalyse the distribution of liquefied petroleum gas (LPG) across Africa using IoT/M2M application like a remote LPG data acquisition/delivery system; thereby, reinventing how we deliver LPG to millions of homes across Africa.

Nigeria is a net exporter of LPG in Africa. It produces over 2MTPA, consumes barely 15 per cent of the volumes and exports the rest. LPG is the least utilized of the four major cooking fuels – firewood, kerosene, charcoal, and gas. Per capita consumption is just above 1kg in Nigeria, which is comparatively less than other West African countries like Ghana (4.7kg) and Senegal (9kg) per capita (WLPGA). Nigeria spends over $1 billion per annum on kerosene subsidy and faces increasing environmental challenges with continuous deforestation as over 50 per cent of households still rely on firewood as cooking fuel.

IoT LPG distribution platform

Nigeria’s evolving LPG market demands a new paradigm enabled by a remote data acquisition system (IoT LPG distribution platform). This system would make it possible to improve the procedure for replacing LPG cylinders for consumers. This holds the potential to boost the efficiency of supply planning, higher stock performance on the distributor’s side and as a result provide a competitive edge in the market. With the combined dynamism of Nigeria’s LPG market and the power of IoT/M2M, we can significantly transform the way we distribute LPGs to over 20 million Lagosians, ushering new distribution possibilities and credit schemes for the 10 biggest urban areas across Nigeria and beyond.

African market is ripe for new intelligent platforms to bring LPG to homes in an efficient manner. We understand that the Nigeria market is dominated by these LPG Sizes: 12.5kg and 25kg LPG with over 3 million LPG cylinders in circulation. In a recent conversation with our overseas technology partner, we discovered that we can monitor 500,000 to one million LPG cylinders and retrofit each cylinder with sensors (IoT Devices) to read the gas levels and imbue it with extra capabilities where possible.

A proposed system architecture will look like this: A virtual dashboard, one that incorporates a mobile app for booking LPG with an analogue part that utilizes sensors and amplifier section; all riding on the back of our national cellular carriers. The arrival of Elon Musk’s Starlink and other satellites (e.g. YahClick, NIGCOMSAT) could potentially scale this service to rural areas with minimal GSM coverage. Smartphone Bluetooth technology and GSM networks can enable the collection of diverse dataset on the LPG cylinders and so help us to intelligently aggregate and deliver LPG cylinders/refills to residential estates or localities in an unprecedented manner.

A broken LPG distribution

Nigeria LPG market is deregulated and increasingly broken at the lower end of the value chain. Major marketers are Oando, Ultimate Gas, Gasland, Total, Ardova Plc, NNPC Retail, Techno Oil and emerging market leaders like ENYO Retail, Banner Gas Group. Our research revealed that trucking is the only inland transportation (recently tricycle buses), which aggravates our weak road networks and drives up retail LPG prices.

Also, there is a broken safety check system which leads to the proliferation of dangerous LPG cylinders in circulation thereby requiring the urgent need for cylinder revalidation and re-certification by regulators which our proposed system architecture can handle. 30-40% of Nigeria LPG distribution is led by unregulated street sellers who help bring LPG to the end users’ homes while experts have said the biggest barrier to LPG availability is poor distribution infrastructure/network.

A new LPG distribution platform architecture

With the platform LPG weight can be monitored automatically and if the gas cylinder is about to empty (thresholds can be set such as 5-10% of gas weight), then automatically a new cylinder booking can be triggered over a mobile app/by logging into the IoT LPG service Provider dashboard via GSM/Bluetooth data exchanges.

Our system is flexible enough to bring it to the notice of a user using a Mobile App and via this Mobile App, the user can trigger the booking of a fresh LPG cylinder or a refill. The system can also be used for complaints. It captures customer’s gas usage and inventory and is integrated into client’s supply chain. It is like an automatic tank gauge (atg) replicated/customized for LPG cylinders. As a result of our weak broadband services, we are using Bluetooth, edge Storage and analytics to mitigate internet /communication loss. Our technology partner’s platform supports multiple cylinder sizes, with user-friendly interface with single line diagram, dashboards, report and alerts with REST API for building additional applications.

Finally, we believe an IoT LPG delivery system should incorporate numerous subsystems, such as a geographic information system, an instantaneous LPG-consumption information system, a reporting system, and a failure diagnosis system. This system should not only provide historical information search, but also provides report sending and download functions, thus facilitating the users to view and research measured data. As a digital service platform, it will revolutionize the way we deliver LPG to homes and also serve as data source for regulatory agencies and policy making for African governments.

________________________________________________________________________

Caesar Keluro is co-founder/CEO, Nanocentric Technologies Limited. He leads ‘Make In West Africa’, a regional Think-tank. He tweets https://twitter.com/KCaesar,  https://www.linkedin.com/in/caesarkeluro/