In order to mitigate the effects of the proposed removal of subsidies for Premium Motor Spirit, more commonly known as gasoline, oil marketers have written to the Federal Government proposing to build about 30,000 gas stations.
As the demand for palliatives to lessen the impact of the subsidy halt gains momentum, Nigerians are currently counting down to the projected date for subsidy removal of June 2023.
According to predictions, if the Federal Government ends the subsidy by June of this year, gasoline may sell for about N750 per litre.
In order to mitigate this, oil marketers wrote to the Federal Ministry of Finance requesting that the Federal Government order the Central Bank of Nigeria to release the N250 billion intervention fund for the National Gas Expansion Programme as loans to the vehicle owner to purchase gas conversion kits.
This happened at the same time that organized labor announced it was thinking about meeting with the incoming administration about when subsidies would be removed.
The oil marketers announced their readiness to deploy gas dispensers to 30,000 filling stations nationwide in a letter dated April 3, 2023 and received by the Federal Ministry of Finance on the same day. The marketer said this was done to lessen the impact of the removal of fuel subsidies.
The Independent Petroleum Marketers Association of Nigeria’s National President, Chinedu Okonkwo, signed the letter, which was addressed to the finance minister and stated in part, “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.”
“To co-locate natural gas dispensers on our network of more than 30,000 filling stations in Nigeria, our partners, Gas Analytics & Solutions Ltd, have an agreement with the independent Petroleum Marketers Association of Nigeria.”
This partnership with IPMAN offers the most cost-effective and quick way to set up the infrastructure required to support a swift national roll-out of CNG (compressed natural gas) for vehicles.
After the subsidy is eliminated, IPMAN expressed confidence that this platform will protect Nigerians from the shock of a high gas price and greatly reduce the need for foreign currency to import gasoline.
Additionally, CNG emits 30 to 60 percent fewer greenhouse gases than gasoline and diesel, making it more attractive to regional and international development finance institutions that are more likely to support natural gas utilization projects than gasoline refineries.
Furthermore, the Nigeria Midstream Downstream Petroleum Regulatory Authority and the Nigeria Gas Aggregation Company have formed a joint working committee to provide the necessary permits, approvals, and natural gas feedstock.
What is still needed, according to the oil marketers, is the Central Bank of Nigeria’s assistance in granting truck, car, and Keke owners access to loans to pay for the purchase of natural gas conversion kits.
According to IPMAN, it submitted an application to the CBN through the NIRSAL microfinance bank for a partnership to develop a financing plan for qualified Nigerians to access the gas expansion facility in order to convert their vehicles. This partnership would require the support of the federal ministry in order to be finalized.
According to the statement, the Gas Expansion Fund was created to support Nigeria’s increased use of natural gas, and qualified vehicle owners’ access to the funds would encourage and support IPMAN members’ need to invest in the necessary infrastructure along the natural gas value chain to supply gas to vehicles.
“IPMAN will not be able to raise the money necessary to set up CNG filling stations without a sizable pool of CNG customers.
“We think that with the Ministry of Finance’s backing, IPMAN’s collaboration with Gas Analytics will offer a platform that can quickly mitigate the effects of the removal of gasoline subsidies and significantly lessen the need for foreign exchange to import gasoline.
We’d like to talk more about this and present our proposal, so we’re asking for a meeting with you. We anticipate hearing from you shortly. Through their umbrella association, the oil dealers said, “Thank you for your time and consideration.
The Federal Government asserted that the CBN N250 billion intervention fund for the National Gas Expansion Program had started to be implemented in August 2021.
Bitrus Nabasu, the Federal Ministry of Petroleum Resources’ then-permanent secretary, had announced that the facility was now accepting applications from potential beneficiaries.
The CBN is funding the NGEP’s intervention facility, which aims to encourage investment in the gas value chain and to stimulate financing for the crucial sector.
According to Nabasu, the fund could be used to establish small-scale petrochemical and gas processing facilities, gas cylinder manufacturing facilities, CNG regasification modular systems, automatic conversion kits or component factories, CNG primary and secondary compression stations, micro-distribution outlets, and service centers for the sale of liquefied petroleum gas.
The Nigerian Labour Congress announced it would meet with the incoming administration after its inauguration to discuss the fuel subsidy regime’s future course of action.
