The Federal Government is offering zero customs duty and zero value-added taxes (VAT) on the importation of compressed natural gas (CNG) conversion kits into the country.
Ajuri Ngelale, the Special Adviser to the president on Media and Publicity stated this during an interview on Friday night via Channels Television.
The reason for this is to boost the inflow of CNG conversion kits into the country while local CNG kit assembly plants are set up in the country.
He said that the government recognizes the need to crash energy prices in the country after the removal of fuel subsidy which has affected the citizenry when it comes to increased food and transportation costs.
According to Ngelale, the Presidential CNG Initiative (PCNGI) which is chaired by the president’s chief of staff, Femi Gbajabiamila, will ensure that mass transit systems are direct beneficiaries of the CNG solution to remove burdens from low-income earners who use okadas, keke apps.
According to Ngelale, the CNG plan will be executed in the states, but it will be done in such a way that it is guided by private sector participation and the regulation of federal authorities.
Implementation strategy
Ngelale said that the foundation has already been laid with the agreement between Nipco Gas Limited and the Nigerian National Petroleum Company Limited on the set up of CNG as an alternative fuel in Nigeria. He said there will be a network of mass transit systems that are operating exclusively over some time, CNG-fueled buses.
He said:
- “This is not a federal or state giveaway, this is a meticulously arranged private sector partnership with the Federal Government. So, we are looking at putting together a minimum of N200 billion at the outset to be able to provide a counterpart funding mechanism for the private sector to come in with certain financing guarantees and also tax relief/incentives for those who will set up CNG-powered businesses.”
What you should know:
Under the NNPC-NIPCO strategic partnership, 35 state-of-the-art CNG stations will be constructed nationwide, including three (3) Mother stations. Once fully operational, the stations can service over 200,000 vehicles daily, thereby significantly reducing the cost of automobile fuel for Nigerians and the cost of transportation.
The CNG project will be rolled out in phases. The first phase, comprising 21 CNG stations, will support intra-city transportation and be ready by the first quarter of 2024.
The second phase, comprising 35 CNG stations, will support inter-city transformation and will be ready by late 2024. This will be further complemented by an additional 56 stations to be deployed by NNPC Retail across the country.
There is need to make room for subject matter experts to drive and operate the CNG Programme. The assembly and installation of the kits and the handling /delivery of the fuel require specialized training to avoid casualties.
Is the advantage in the fact that CNG is readily available compared with PMS, or that its operational cost to the point sales to end-users is less?
FG should equally look into blocking possible loopholes for sabotage. And as long as our national culture is unable to suppress impunity, this may be another solution with more barks than bites: I pray not.
How do you explain the price of ₦400,000 to convert a car?
CNG is a very nice approach to reduce the dependence on PMS, but how many Nigerians can afford the #400,000 cost of installation. Pls the government should look into it!
Why are you leaving this project to an Indian company alone NIpco when there other Nigerian players like Bina E- cooking gas & oil Ltd. Apart from CNG there other Autogas like LPG and propane auto gas which is another source fuel. We have propane more than CNG in Nigeria.