– Promises 50% infrastructural support to oil marketers
OpeOluwani Akintayo
Lagos — The Federal Government on Monday unveiled a plan to convert 200, 000 commercial vehicles to run on gas this year.
This was revealed at a meeting for the deployment of CNG (Compressed Natural Gas, popularly called autogas) in Nigeria, between Minister of State for Petroleum Resources, Timipre Sylva and oil marketers in Abuja.
According to Sylva, the government was out to ensure that it made available alternatives required before the removal of subsidy on Premium Motor Spirit (petrol), stressing that the deployment of autogas was one of such key alternatives.
Senior officials of the Major Oil Marketers Association of Nigeria, Depot and Petroleum Products Marketers Association of Nigeria, as well as other key players in the downstream sector attended the meeting.
He also stated that the government would be supporting them with 50 percent of the conversion kits to fast-track the process, adding that additional support as required would be given, going forward.
The Federal Government had since 2019, been pushing for a switch from petrol/diesel vehicles to autogas, and declared 2020 as the year of gas.
As at last year, oil marketers were said to have obtained a N250bn gas intervention fund from the Central Bank of Nigeria to actualise the conversion process as well as purchase products.
“We said we must provide alternative fuel and the alternative that we concluded on was the autogas alternative. To provide it for our people,” he stated.
He added, “Since this agreement between us (government and marketers), a lot of work has been going on and we have come to a certain point where we need to take it further. But we cannot move further without ensuring that you as our partners are fully on board.”
In the framework, the government explained that with abundant gas reserves of about 206.53 trillion cubic feet, a population of about 200 million people, and the enactment of the Petroleum Industry Act, which eliminated the continuous absorption of petrol subsidy, it was now vital to deploy autogas.
It stated that its priority now was the rapid and strategic introduction of Natural Gas Vehicles as an alternative fuel for transportation in Nigeria in line with the approved National Gas Policy.
“This will pave the pathway to full deregulation of the downstream petroleum sector in Nigeria, while reducing the effect of deregulation on transportation costs,” the document read in part.
It added, “The Ministry of Petroleum Resources was charged with the responsibility to provide autogas (LPG, CNG, LNG) as an alternative and competitive fuel for mass transportation
“CNG was selected as the fuel of choice because it holds a comparative advantage due to its ease of deployment, its comparatively lower capital requirements, commodity’s supply stability, existing in-country volumes, and local market commercial structure which relies predominantly on the naira.
“Hence a single track CNG deployment is proposed in the initial phase and other alternatives can be considered as the market attains maturity.”
Three implementation options were highlighted in the document, as the government stated that in the first option, its target was to convert one million public transport vehicles and install 1,000 refueling centres within 36 months.
For the first 18 months it targets to achieve 500,000 conversions and 580 refueling centres supplied by five Original Equipment Manufacturers, among other targets.
In the plan, the government targets to convert 200,000 commercial vehicles this year, including tricycles, cars, mini-buses and large buses.
The cities captured in Phase 1 of the project include Abuja, Kaduna, Kano, Kogi, Kwara, Lagos, Ondo, Oyo, Edo, Delta, Bayelsa, Niger, and Rivers.
Cities under Phase 2 were listed as Sokoto, Katsina, Jigawa, Borno, Bauchi, Gombe, Yobe, Osun, Ekiti, Enugu, Anambra, Imo, Cross River, Abia, Akwa Ibom and Plateau. For Phase 3 cities, they were listed as Kebbi, Zamfara, Yobe, Gombe, Taraba, Adamawa, Benue and Ebonyi
On the selection criteria for network operators, the government stated that the marketer must own and/or operate a minimum of 21 stations nationwide.
The dealer must own and/or operate a minimum of five stations in each proposed city and must be willing to demonstrate creditworthiness and the ability to pay back within the stipulated time frame.
The Executive Secretary, MOMAN, Clement Isong, told the minister that marketers were willing to partner with the government and expressed delight in the government’s resolve to support marketers with 50 per cent of the required conversion kits.
Last November, the Lagos State Governor, Babajide Sanwo-Olu, said his administration was collaborating with the federal government to develop auto-gas fuelling stations across the state to reduce carbon emission.
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