The Federal Government has announced the setting up of infrastructure fund for the midstream and downstream sector targeted at developing gas infrastructure to actualize Auto Gas Transition as alternative to petrol.
Auto Gas conversion was part of the structure which the government planned to put in place towards full deregulation for alternative means to reduce the impact of the fuel subsidy removal on Nigerians.
According to NAN, this was disclosed by the Minister of State for Petroleum Resources, Timipre Sylva, during a meeting with oil marketers on Compressed Natural Gas (CNG)/Auto Gas Transition Programme on Monday in Abuja.
The meeting was organised to discuss private sector’s engagements and structures to put in place before subsidy removal and strategies on how to deploy Natural Gas Vehicles (NGVs) within the shortest timeframe.
What the Minister of State for Petroleum Resources is saying
Sylva told the oil marketers that the midstream and downstream regulatory authorities already had infrastructure development fund targeted at developing the sector.
He said, “So there will be some collaboration between you and the infrastructure fund to set things up for auto gas conversation. We will bring out the fund along with some countries Original Equipment Manufacturers (OEMs) to hook up and assess.
“The burden will not be on you now, that is why we are bringing you on board, already the funding is in place to enable this aspect of your business.
“Government is coming in, we will provide 50 per cent of the funding while the country OEMs will provide another 50 per cent for you to assess. The programme will start in March.’’
Sylva, while speaking, recalled that the agreement around Auto Gas policy a year ago was clear, that there must be a critical amount of vehicles converted and corresponding critical amount of dispensing stations in place for the system to kick-start.
The Minister said, “If not, we will have a situation where converted vehicles will not have a place to refuel or stations not having converted vehicles to fill.
“The conversion process has been going on and we have been talking to OEMs. To do this, we agreed that we needed to have one million vehicles converting in the first place.’’
He said that the government will be partnering credible local marketers to participate with the OEMs to put their system in place in Nigeria by installing dispensing stations and convert the stations.
Mr Olumide Adeosun, Chief Executive Officer, Ardova Plc. and Chairman, Major Oil Marketers Association of Nigeria (MOMAN), was full of praise for the decision to use CNG cars as a remedy towards escalating cost of fuel and to soften impact of deregulation on Nigerian citizens.
Adeosun explained that so far it had set up a working group on how best to implement the conversion determining the scope of feasibility, supply and demand including infrastructure, finance and investment.
What you should know
- Recall that in May 2021, the federal government said it will collaborate with the Central Bank of Nigeria (CBN) to ensure the availability of conversion kits for a critical mass of vehicles expecting to convert to use of autogas.
- This is part of the measure to ensure full implementation of the AutoGas Policy which was launched by President Muhammadu Buhari on December 1, 2020, to help reduce the impact of the rising pump price of petrol.
- The Federal Government had earlier estimated that the Compressed Natural Gas (CNG) will cost N97 per litre, as it had promised to provide alternatives to the Premium Motor Spirit (PMS)
