FG Makes Another Move To Help Filling Stations Begin Sale of Fuel Priced at N200

FG Makes Another Move To Help Filling Stations Begin Sale of Fuel Priced at N200

  • There are indications that the federal government may assist filling stations in installing CNG pumps
  • This is part of FG's plans to accelerate the adoption of CNG by Nigerians, which is relatively cheaper than petrol
  • Independent marketers have raised concerns that the cost of setting up CNG pumps is too expensive

Legit.ng journalist Dave Ibemere has over a decade of business journalism experience with in-depth knowledge of the Nigerian economy, stocks, and general market trends.

The federal government will consider assisting independent fuel marketers financially in installing Compressed Natural Gas (CNG) pumps at filling stations.

The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) had earlier ordered all filling stations to commence selling CNG.

Nigerian government moves to make fuel price cheaper for citizens
Hope rises for Nigerians to buy cheaper fuel Photo credit: Bloomberg/contributor
Source: Getty Images

The order is part of President Bola Tinubu administration's broader plan to accelerate the adoption of CNG across Nigeria.

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CNG and price

CNG is a fuel gas under pressure that remains clear, odourless and non-corrosive. It is an alternative to petrol.

According to Nagendra Verma, the managing director of NIPCO Gas said AutoGas for cars, taxis and tricycles is being sold at about N200 per standard cubic foot, while for heavy commercial vehicles, CNG is sold at N260 per standard cubic meter (SCM).

CNG fuel at filling stations

Punch reports that following the directive, the Independent Petroleum Marketers Association of Nigeria (IPMAN) complained that installing CNG pumps was too expensive.

They cited the current high cost of borrowing from banks as one reason it will be challenging to help achieve the government's objectives.

Chinedu Ukadike, quoted in the report, noted that IPMAN members support the federal government move but lack the funds to install CNG pumps in filling stations across the country.

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He said:

"In our last meeting with the Nigerian Midstream and Downstream Petroleum Regulatory Authority, we were advised to install pumps and tanks as add-ons to our stations. We raised concerns about licensing and the conversion centre for CNG vehicles. Despite the government's agreement to use some of our stations as conversion points, we are still unclear about the next steps to integrate independent marketers into the CNG programme.
Regarding financing, some banks have approached us, but we believe a government-established microfinance bank or an energy/petroleum bank is necessary for marketers to obtain loans without high interest rates.
The current commercial bank interest rates are unsustainable, and we need government assistance for fresh capital. We are already incurring significant costs in distributing petroleum products.
"We would, however, also appreciate having an energy bank to enable us obtain loans at a better rate than the current one. I will also state clearly that marketers can distribute CNG. We control over 80 per cent of the distribution outlets scattered across the nooks and crannies of the nation.”

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FG ready to help marketers install CNG pumps

In response, Michael Oluwagbemi, the programme director/chief executive officer of the Presidential Compressed Natural Gas Initiative, said the government would consider assisting the marketers if they needed funding to install CNG pumps at their filling stations.

He, however, noted that the marketers already have access to a number of government interventions.

Michael Oluwagbemi added:

"If a coordinated response is needed, such as creating a special sub-fund within these existing funds, we’ll certainly consider that possibility. However, it is feasible to finance it. We've assessed the return on investment for gas, and it's significantly higher than that of petrol, gasoline, and diesel.
"Therefore, even with a financial or commercial loan, they can break even within 18 to 24 months if they have a solid business proposition."

NNPC sends message to Nigerians on petrol

Meanwhile, Legit.ng earlier reported that the NNPC sent an important message to Nigerians about petrol scarcity.

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CNG: Man who converted his car to use gas shares how to drive car in Nigeria without petrol

The Nigerian National Petroleum Company Limited (NNPC) assured that it has over 1.5 billion litres of stock of premium motor spirit (PMS), also known as petrol, enough to serve the country for the next 30 days.

This was disclosed in a statement released on X (formerly Twitter) on Tuesday, May 7, 2024, and signed by Olufemi Soneye, the company's chief corporate communications officer.

Proofreading by James Ojo Adakole, journalist and copy editor at Legit.ng.

Source: Legit.ng

Dave Ibemere avatar

Dave Ibemere (Senior Business Editor) Dave Ibemere is a senior business editor at Legit.ng. He is a financial journalist with over a decade of experience in print and online media. He also holds a Master's degree from the University of Lagos. He is a member of the African Academy for Open-Source Investigation (AAOSI), the Nigerian Institute of Public Relations and other media think tank groups. He previously worked with The Guardian, BusinessDay, and headed the business desk at Ripples Nigeria. Email: dave.ibemere@corp.legit.ng.

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