As the argument on who bears the cost of conversion of vehicles from petrol to gas continues, many energy analysts are wondering the rationale behind the current campaign when there is the global push for energy transition from fossil fuels to new energy sources.
By Goddy Ikeh
FOLLOWING recent outcries over the high cost of petrol in the country and the deregulation of the downstream sector of the Nigerian oil industry, the Nigerian government has engaged in the promotion of gas for powering cars and generating plants instead of petrol.
According to Nigerian officials, using gas for powering vehicles and generating sets is cheaper and that the current drive is part of the move to provide Nigerians with autogas to cushion the effects of rising petrol costs in line with President Muhammadu Buhari’s commitment to adopt gas as an alternative fuel for the country.
The federal government, according to the officials, has commenced the conversion of official vehicles belonging to Ministries, Departments and Agencies, MDAs, from petrol to Compressed Natural Gas (CNG) in designated centres in Abuja.
Speaking recently on the ongoing Autogas campaign, the minister of state for petroleum resources, Timipre Sylva, said that the conversion programme underscored the seriousness of the new government initiative.
Sylva, who visited the autogas dispensing station and conversion inspection exercise, at the NNPC autogas dispensing facility in Jahi and Autolady Garage in Abuja, where some government official vehicles were being converted, before the inauguration of the autogas programme, expressed satisfaction with the conversion process and urged conversion centres to make vehicle and user-safety a priority during the process.
He said that his vehicles and others in the president’s fleet would soon be converted as well.
Speaking in the same vein, the Executive Secretary, Petroleum Products Pricing Regulatory Agency, PPPRA, Abdulkadir Saidu, said that the government would ensure that autogas would soon be made available all over the country.
“Nigerians can rest assured of the government’s undying commitment to providing a cheaper and cleaner alternative to petrol, as prices have been on an upward climb in recent months following the deregulation of the downstream sector of the oil industry.
“Aside from the fact that autogas is cheaper, we are also concerned about making the conversion of cars affordable so that Nigerians can indeed reap the advantage of this new policy,” he said.
The PPPRA boss, after the inspection, also said that some filling stations across the country were already keying into the plan by adding autogas dispensers to their stations.
He urged Nigerians to embrace gas-powered vehicles as they are cheaper and more environmentally friendly than any other fuel available on the market today.
He also noted that the majority of vehicles built in the last two decades were well suited to conversion for dual fuel applications and, therefore, safe for all Nigerians who are willing to convert their vehicles.
While inaugurating the autogas programme in Abuja, President Muhammadu Buhari urged Nigerians to embrace the use of gas as an alternative to petrol to power their vehicles.
Speaking at the event held virtually at the State House to unveil National Gas Expansion Programme and National Autogas Roll-out Initiative recently, President Buhari said: “It is no longer news that the vast Natural Gas resources, which Nigeria is endowed with have hitherto been used sub-optimally as a result of a dearth of gas processing facilities and infrastructural connectivity for effective and optimal domestic utilization.
“As I mentioned above, with a proven reserve of about 203 Trillion Cubic Feet (TCF) and the additional upside of 600 TCF ranking Nigeria as the 9th in the world currently, the need for domestic gas expansion and utilization is apparent.’’
Buhari explained that the deregulation of the downstream sector has exposed many to price volatilities in the global market, urging attention to more affordable alternative for energy, especially with Nigeria’s heavy reserves.
“Therefore, the roll-out of the National Gas Expansion Programme, Auto-gas initiative is coming at the right time, especially in light of global crude oil market fluctuations coupled with the full deregulation of the local PMS market.
“These developments have made it imperative to focus on gas as an alternative fuel to move Nigeria from the conventional dependence on white products for autos and prime-movers of industrial applications to cleaner, more available, accessible and affordable energy source.
“The outcome will not only cushion the effect of the downstream deregulation that this government has to painfully implement, but also create new markets and enormous job opportunities for our people.’’
The Nigerian leader said the auto-gas initiative would lead to increased domestic gas utilization and enrich the trajectory of national economic growth and development, adding: “I, therefore, encourage everyone to embrace gas in form of LPG, CNG and LNG as an alternative fuel for autos and other prime-movers.’’
“The Minister of State Petroleum Resources is hereby directed to commence the process of hand over of mass transit buses to Organized Labour as part of our government’s pledge to continue providing the support that will ease the transportation challenges Nigerians are facing at this time,’’ the statement by the presidential spokesman, Femi Adesina, quoted Buhari as saying.
He expressed appreciation to Nigerians and the Organized Labour for restraint, understanding and patience as the country tackles myriad of economic challenges, assuring that the Federal Government is working hard to ameliorate the situation.
“Let me now express my deep appreciation to Nigerians for their patience, and Organized Labour for its maturity and patriotism as we collectively navigate these global economic and other challenges.’’
In his remarks at the event, Nigeria’s Minister of State for Petroleum Resources, Mr. Timipre Sylva, said the ministry was focusing on the development of skills, technology and manpower as well as growth in the utilisation of LPG, CNG and LNG.
He added that the National Gas Expansion programme, which was initiated this year to boost the utilization of gas in the short and medium-term “is expected to create two million jobs per annum, promote skills acquisition and enhance technology transfer in addition to growing the nation’s GDP.”
The Group Managing Director of NNPC,
, disclosed that that from 2016 to 2019, the Federal Government had spent over N3 trillion subsidizing the pump price of petroleum products particularly petrol insisting that the subsidy regime did not benefit the masses that the president is passionate about.
He added that the economic effects of the COVID-19 pandemic have made it impossible to continue with the onerous subsidy regime.
The Vice President, Professor Yemi Osinbajo, has also lent his support to the Programme, assuring that the federal government will focus on autogas as an alternative to petrol.
Osinbajo, who spoke ’s spokesman during a virtual interactive session hosted by the Africa Report magazine, said that the government was determined to offer Nigerians an effective option to petrol and would focus on developing Compressed Natural Gas otherwise known as autogas, which is priced significantly lower than Petrol.
“What we have decided to do is to focus on Compressed Natural Gas (CNG) which is about half the price of petrol today. So, if we use CNG for our cars and for our buses, it will cost between N78 and N80 or so per liter.”
According to him, under the Nigerian Economic Sustainability Plan, NESP, the federal government’s objective is to promote domestic use of CNG and support the creation of 1 million jobs by maximizing the domestic use of CNG while reducing reliance on refined petroleum products like kerosene and petrol.
Meanwhile, Saraki Auwalu, director, Department of Petroleum Resources, DPR, has said that some petrol stations in Nigeria have the capacity to install autogas dispensing facilities. He said henceforth, the licences of those stations would only be renewed if they install the necessary facilities to dispense the commodity.
Auwalu, who spoke during the launch of the National Gas Expansion Programme, NGEP, in Abuja, stated that already, 9,000 filling stations had been initially selected across the country to dispense autogas, comprising Liquefied Natural Gas, LNG, Compressed Natural Gas, CNG, and Liquefied Natural Gas, LPG. He stated that out of about 31,000 petrol stations across the country, 9,000 were identified as having the capacity to install gas facilities as add-on, in their premises.
“Going forward, in addition to the 9,000 identified filling stations, it would be made compulsory for other petrol stations having capacity to install autogas facilities in their premises to do so, as this would be a crucial part of their licensing requirements,” he said.
Auwalu added that the DPR was playing a crucial role in the National Gas Expansion Programme, NGEP, especially in the autogas scheme to ensure safety in the deployment of the facilities and in utilization of the commodity. The DPR chief executive noted that the petroleum sector regulator had already commenced a number of initiatives aimed at the safe usage of gas products under the NGEP and the autogas scheme.
“This shows that we not just regulators, we are business enablers and opportunity providers. Today, this happened because DPR issued licences and enabled these businesses. Now it would provide alternative fuels for all Nigerians. All these would happen if DPR grants licences. The value chain would influence the lives of over 200 million Nigerians. As said, this would be replicated not only in NNPC mega and filling stations; the 9,000 petrol stations that had been identified were licensed by DPR. We look at every one of the licences and see stations that are capable of accommodating Compressed Natural Gas, CNG, autogas. That station must —it is compulsory —
for the next licensing of that facility, must have this gas facility so that energy would be available to all Nigerians.”
Apart from the wrong timing of the programme, some energy analysts believe that the issue of high cost of conversion from petrol to gas may affect its smooth implementation. They believe that many Nigerians will not be willing to cough out N250,000 in this harsh economic condition in the country to carry out the conversion, while the issue of availability of gas at gas stations across the country in future is another contentious issue.
The analysts recalled that Sylva had early announced that the government would do the conversion from petrol to gas free of charge in order to alleviate the sufferings of Nigerians affected by the spike in pump price of petrol. But the minister’s Technical Adviser on Gas Business and Policy Implementation, Justice Derefaka, was quoted as saying that those interested in converting their vehicles would have to part with an average of N250,000, while persons using Sports Utility Vehicles may have to pay more.
However, it is not too late for the government to review this ongoing campaign since it is not in consonance with the global push for energy transition from fossil fuels to new energy sources, which gas is included and will still play a significant role in fueling the world for at least the next three decades. According to the energy experts, the price of petrol will drop drastically in future and this will render the drive of conversion from petrol to gas in a country with one of the worst road infrastructure and high accident records in Africa unattractive.
– Dec. 7, 2020 @ 17:11 |GMT |