The Federal Government may provide financial assistance to independent fuel marketers for installing Compressed Natural Gas (CNG) sales pumps at filling stations nationwide.
This consideration comes after the Independent Petroleum Marketers Association of Nigeria (IPMAN) expressed difficulties in funding the installation of CNG pumps due to high costs and prohibitive bank interest rates.
President Bola Tinubu ended the fuel subsidy on May 29, 2023, which led to higher fuel prices. To mitigate this impact, the government plans to introduce CNG-powered mass transit buses and tricycles.
Presidential aide Bayo Onanuga announced that over 600 buses are slated for production in the first phase, with a new plant on the Lagos-Ibadan Expressway set to assemble thousands of tricycles.
About 2,500 tricycles are expected to be ready by May 29, 2024. The initiative also includes purchasing 5,500 CNG vehicles, 100 electric buses, over 20,000 CNG conversion kits, and developing CNG refueling and electric charging stations.
The private sector has committed over $50 million to support this initiative.
Farouk Ahmed, CEO of the Nigerian Midstream and Downstream Petroleum Regulatory Authority, mandated oil marketing companies to install CNG pumps.
He emphasized the government’s push for CNG as a way to reduce the economic burden of petrol.
New retail licensees must now include CNG points in their stations to receive government approval.
IPMAN’s Public Relations Officer, Chinedu Ukadike, highlighted the financial challenges faced by marketers in installing CNG pumps and called for the establishment of an ‘energy bank’ to provide accessible loans.
He welcomed the CNG initiative, noting its potential to reduce petroleum imports and strengthen the naira.
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Ukadike expressed hope that government assistance would make it easier for marketers to fund CNG pump installations.
Michael Oluwagbemi, CEO of the Presidential Compressed Natural Gas Initiative, acknowledged the marketers’ funding challenges and mentioned existing government intervention funds that could be accessed.
He emphasized that the return on investment for gas is higher than for petrol or diesel, making the installation of CNG pumps financially viable even with commercial loans.
He assured that the government would consider creating a special sub-fund if necessary.
In the Federal Capital Territory, taxi unions are meeting to discuss integrating CNG vehicles into their operations.
Shehu Shugaba, President of Painted Abuja Taxis, mentioned that the government had not officially communicated the plan, but awareness was growing.
The Road Transport Employers’ Association of Nigeria (RTEAN) and the National Union of Road Transport Workers (NURTW) have called on the government to support vehicle conversions to CNG.
Both unions view CNG as a cost-effective and environmentally friendly alternative to traditional fuels. RTEAN’s Assistant Secretary-General, Tiwalade Akingbade, emphasized the benefits of CNG and called for government support in vehicle conversion.
Similarly, Mustapha Adewale, Chairman of NURTW’s Ogun State Chapter, welcomed the initiative and mentioned that they are consulting banks for support, hoping for government intervention to facilitate the conversion process.
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