Commodities

CNG Conversion to Save Nigeria $4.4bn in Annual Petrol Import Costs

Published

5 months ago

June 5, 2024

The Nigerian Federal Government announced on Tuesday that it will reduce the importation of Premium Motor Spirit (PMS), commonly known as petrol, by approximately $4.4 billion annually through the adoption of Compressed Natural Gas (CNG).

This announcement was made under the Presidential Compressed Natural Gas Initiative (PCNGI).

The initiative aims to convert one million diesel and petrol-powered vehicles to run on CNG, providing a substantial financial reprieve for the country.

According to Zayyan Tambari, Coordinator for Regulations, Compliance, and Facilitation at PCNGI, this move is expected to save Nigeria around $4.4 billion annually in petrol import costs.

Speaking at the Co-Creation Session on Nigeria Gas Vehicle Monitoring System in Abuja, Tambari highlighted the Federal Government’s target to replace 20% of the 50 million liters of petrol consumed daily in Nigeria with CNG.

This shift is part of a broader strategy to enhance energy sustainability and economic resilience.

Tambari’s statements followed a report indicating that the Federal Government had already commenced the rollout of CNG-powered buses and tricycles.

The initiative was officially launched in Ilorin, Kwara State, with Governor Abdulrahman Abdulrazak inaugurating a refueling and conversion center.

The launch included the unveiling of CNG buses and tricycles, marking the beginning of a nationwide deployment.

The Special Adviser to the President on Information and Strategy, Bayo Onanuga, confirmed the launch, emphasizing the Federal Government’s commitment to expanding CNG infrastructure.

“Ilorin’s launch is just the beginning. We are setting up refueling and conversion centers across the country,” Onanuga said.

During the co-creation session in Abuja, the PCNGI noted that an investment of about $890 million would be required to develop the necessary infrastructure for the alternative fuel.

Ekperikpe Ekpo, the Minister of State for Petroleum Resources (Gas), represented by Abel Nsa, underscored the government’s dedication to maximizing the benefits of Nigeria’s abundant gas resources.

Ekpo emphasized the need for public education and adherence to safety standards in the use of CNG.

“We must educate ourselves and adopt new tools and materials to ensure the safe and efficient use of CNG,” he stated, drawing a parallel to the economic impact of mobile phone adoption during former President Olusegun Obasanjo’s tenure.

Ogbugo Ukoha, Executive Director for Distribution System, Storage, and Retailing Infrastructure at the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), announced that new filling stations would only be licensed if they provide CNG dispensing points.

“We are engaging stakeholders to mandate the conversion of fuel trucks and fleet owners to CNG, given the high cost of diesel,” Ukoha said.

Michael Oluwagbemi, Project Director and CEO of PCNGI, highlighted the economic and environmental advantages of CNG, stating that it is cheaper, cleaner, safer, and more sustainable than petrol.

He stressed the importance of a smooth transition, strong regulatory compliance, and cooperation across the ecosystem to ensure the success of the CNG initiative.

The PCNGI has already commenced a nationwide CNG conversion program for mass transit buses, starting in Lagos, Kwara, the Federal Capital Territory, and Rivers states.

The program is being executed in partnership with major transport unions, including the National Union of Road Transport Workers (NURTW), Road Transport Employers’ Association of Nigeria (RTEAN), and Nigerian Association of Road Transport Owners (NARTO).

The initial phase involves eight of over 120 designated conversion workshop sites, with plans to scale up operations across 15 states in the next 45 days.

“This ambitious initiative aims to convert mass transit vehicles to cleaner energy sources, significantly reducing emissions and promoting environmental sustainability,” Oluwagbemi stated.

This landmark initiative marks a significant step towards reducing Nigeria’s dependence on imported petrol, promoting the use of domestic gas resources, and advancing the country’s environmental sustainability goals.

As the nation embarks on this journey, the anticipated $4.4 billion annual savings will be a critical boost to Nigeria’s economy.

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Samed Olukoya

Is the CEO and Founder of Investors King Limited. He is a seasoned foreign exchange research analyst and a published author on Yahoo Finance, Business Insider, Nasdaq, Entrepreneur.com, Investorplace, and other prominent platforms. With over two decades of experience in global financial markets, Olukoya is well-recognized in the industry.

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Commodities

Cooking Gas Prices Surge Amidst Import Reliance, NIPCO CEO Calls for Local Refinery Support

Published

6 days ago

October 15, 2024

Yetunde Olugbenga

Just like the surge in fuel pump prices, the price of Liquefied Petroleum Gas (LPG), commonly known as cooking gas, has increased.

The Managing Director/Chief Executive Officer of the Nigerian Independent Petroleum Company (NIPCO) Plc, Suresh Kumar, has urged the Federal Government to encourage Dangote Refinery and other domestic refineries to produce LPG to help lower the soaring price of cooking gas.

According to experts, the increase in cooking gas prices was due to insufficient local production.

Meanwhile, at the recently concluded National Conference of the Nigerian Association of Liquefied Petroleum Gas Marketers 2024, held in Lagos, Kumar revealed that over 60 percent of the cooking gas consumed in Nigeria is imported, which is a major factor behind the price hike.

Kumar acknowledged that support for local refineries would boost cooking gas production and reduce LPG importation.

“There is hope that reliance on imported LPG will decrease, which will positively influence domestic prices. Greater local production will make LPG more affordable since it reduces exposure to foreign exchange fluctuations and international pricing dynamics,” he stated.

Kumar further noted that the Federal Government should provide financial aid by investing in local refineries to accelerate LPG production, meet public demand with adequate supply, and reduce costs.

“We must work with the Nigerian Midstream and Downstream Petroleum Regulatory Authority and other stakeholders to end gas flaring in the country. Substantial investments are needed to capture and process flared gas to increase domestic supply beyond the current 1.5 million MT to at least 5 million MT annually,” he reiterated.

As of the time of this report, Investors King gathered that in the Osogbo area of Osun State, the price has risen from N1,400 to N1,500. In Ilorin, Kwara State, it is currently being sold for N1,500.

Meanwhile, in Lagos State, the current price is N1,400, compared to the previous price of N1,300.

Commodities

Federal Government Expands Subsidized Rice Program to Lagos, Kano, and Borno

Published

3 weeks ago

October 2, 2024

Bassey Marshall

The Federal Government has announced that Lagos, Kano, and Borno will be the next states that will benefit from its subsidized rice program aimed at addressing economic hardship in the country.

The initiative aims to sell a 50kg bag of rice for ₦40,000.

According to a director at the Federal Ministry of Agriculture and Food Security, plans are already underway to roll out the food subsidy program in these states.

Investors King learned that since the launch of the subsidized rice program in September, only civil servants in Abuja, the Federal Capital Territory (FCT), have benefited from it.

However, the director revealed that the government is ready for the next phase of the program, which will help address growing food insecurity in Nigeria.

The source disclosed that the next phase, set to begin shortly, is part of a broader strategy by President Tinubu’s administration to ensure that no Nigerian goes to bed hungry.

The official also dismissed reports that the sale of subsidized rice has been suspended in Abuja, clarifying that the intervention is still in its early stages.

According to him, while the ministry is actively coordinating with other states, sales are ongoing in Abuja.

“As I speak to you now, we are about to activate sales in Lagos and Kano states, with Borno State also set to be addressed,” the agriculture ministry official stated.

“We’ve barely started; how can we stop? Sales are ongoing, and we are actively engaging with other states,” he added.

Commodities

Osun Government Seals Off Gold Mining Company For Allegedly Evading Tax

Published

3 weeks ago

September 30, 2024

Ugwoke Ogbodo

The Osun State Government said it has sealed up the business premises of Segilola Resources Operating Limited over alleged tax evasion.

A statement by the state Commissioner for Information and Public Enlightenment, Kolapo Alimi, on Monday, said the action followed a court order permitting the state to seal the company for “various flagrant tax violations and failure to disclose fully the employees directly and indirectly involved in its business activities, obstruction of tax processes by failing to provide timely tax information and documents.”

“Segilola Resources Operating Limited is one of the major companies carrying out mining activities and mineral exploration in the State as a subsidiary of Thors Explorations Limited listed on London and Toronto Stock Exchanges.

“After a series of demands, meetings, consultations, and engagements, the company still remained adamant and remorseless in its tax evasion and other violations. The Attorney-General of Osun State approached the court and consequently obtained an Order of the Court to seal up the Company until the due sum calculated from 2019 to 2023 is fully liquidated into the Osun State Government Account.

“The state notes with regret that while some companies make billions of naira in the state, especially in the mining sector, they are not ready to give the state its lawful dues.

“While the issue of shareholding values due to the acquisition of Osun state interest in Tropical Mines is purely commercial, we will continue to hold the company responsible for all its actions,” he said.

Recall that the gold mining company, in a statement by its Country Manager, Austin Menegbo, had denied the allegations by the state government, claiming that it has consistently demonstrated a commitment to being a law-abiding, transparent corporate entity, fulfilling all tax obligations and royalty payments in full and on time.