Article summary
- Innoson Vehicle Manufacturing (IVM) has released a line of natural gas-based vehicles.
- IPMAN has recently committed to establishing natural gas dispensing machines at 30,000 filling stations across the country.
- Both entities can fulfil the goals of the federal government to explore gas as a major transportation fuel in Nigeria, especially as subsidy will be removed from Premium Motor Spirit (PMS).
The Independent Petroleum Marketers Association of Nigeria (IPMAN) and Nigerian automaker, Innoson Vehicle Manufacturing (IVM), could meet some of the goals of the National Gas Expansion Program (NGEP).
This follows the announcement by IVM, yesterday, that it had launched a line of liquefied natural gas (LNG) and compressed natural gas (CNG) vehicles at its Nnewi, Anambra state factory. The company said:
- “We are thrilled to announce that the grand commissioning of the Innoson CNG/LNG bus by the President of the Manufacturers Association of Nigeria (MAN) is finally here! This revolutionary vehicle is the latest addition to Innoson’s line of eco-friendly and sustainable transportation solutions, and we are proud to be a part of this groundbreaking moment in Nigeria’s manufacturing industry.”
The NGEP context
The NGEP is an initiative developed by the Buhari administration to harness gas and make Nigeria a gas-based economy.
On April 3, IPMAN notified Nigeria’s Ministry of Finance that it was ready to provide natural gas dispensers to 30,000 filling stations across the country. A part of the letter read:
- “We are writing to request an audience with you to present a palliative solution to cushion the impact of the removal of the unsustainable petrol subsidy.
- “Our partners, Gas Analytics & Solutions Limited, have an agreement with the independent Petroleum Marketers Association of Nigeria (IPMAN) to co-locate natural gas dispensers on our network of over 30,000 filling stations in Nigeria.
- “This collaboration with IPMAN presents the most economic and expedient platform to deploy the necessary infrastructure to support a fast national roll-out of CNG (Compressed Natural Gas) for vehicles.
- “What is left is the support of the Central Bank of Nigeria to provide access to the Gas Expansion Fund for vehicles, Keke, and truck owners to access loans to finance the acquisition of natural gas conversion kits.
- “Without a large pool of CNG customers, IPMAN will not be able to raise the funds required to set up CNG filling stations.”
IPMAN wrote the letter to request that the Central Bank of Nigeria (CBN) releases the N250 billion NGEP implementation fund as a viable solution to the eventual removal of fuel subsidy which the government has planned for June 2023.
With the launch of the LNG/CNG-powered vehicles from IVM, the government needs to take advantage of the opportunity, by investing in IVM and making use of those vehicles to enable mass transportation for low-income earners across the country as a palliative for when the fuel subsidy is removed.
This was the position of natural gas analyst, Kayode Oluwadare during a recent conversation with Nairametrics. According to him, it makes sense to invest in an indigenous company that has LNG and CNG mass transit vehicles. This way, IVM vehicles can be powered by the natural gas dispensing stations to be set up by IPMAN and Nigerians can pay low transportation fares while using the mass transit vehicles because the costs for running natural gas-based vehicles are lower than running PMS vehicles.
Oluwadare also said that this can be done while still encouraging tricycles (Keke), and private car owners to convert their PMS vehicles to LNG or CNG, to create a wide pool of natural gas vehicle users in the country.
What you should know
Some stakeholders have criticized the federal government’s decision to conduct a cash transfer to 50 million Nigerians using the $800 million loan from the World Bank as a palliative solution to the removal of fuel subsidies.
- This is because the cash will not do anything for the people on a long-term basis as opposed to transportation subsidies or investing in natural gas-powered vehicles which have no use for fuel/PMS.
