Fuel Subsidy: ‘Shift to Autogas’ – Nigerian government urges operators

In response to the rising price of petrol and by extension, the return of fuel subsidy, the Federal Government has urged operators in Nigeria’s downstream sector of the petroleum industry to shift to Autogas.

The National Operation Controller, Independent Petroleum Marketers Association of Nigeria (IPMAN), Mr Mike Osatuyi who stated the report declared that the call was necessary as Autogas showed cheaper at about 60 per cent of the current price of petrol with a price that could hit the roofs at about N181.53 per litre without government intervention through the Nigerian National Petroleum Corporation, NNPC.

The breakdown provided by the Petroleum Products Pricing Regulatory Agency, PPPRA, also showed that the landing cost of petrol rose from an average of N143.60 in December to N158.53 per litre on January 7, 2021. But the product is currently being sold at between N160 and N165 per litre at many filling stations in Lagos and its environs because of the intervention of the NNPC, apparently a major importer of petrol and other petroleum products.

However, worried about the continued bearing of the subsidy burden by the NNPC, the Ministry of Petroleum Resources, through the National Gas Expansion Programme, NGEP, has intensified efforts to achieve a massive shift to Autogas in 2021.

An investigation showed that the NGEP has already engaged with many stakeholders, including the Department of Petroleum Resources, DPR, Major Oil Marketers Association of Nigeria, MOMAN, and IPMAN.

In a telephone interview  Osatuyi, who confirmed the engagement with NGEP, he said: “The price of crude has increased from about $40 to $55 per barrel in the global market. Consequently, the price of petroleum products, including petrol, have also increased. In fact, if not for the NNPC, we should have been selling petrol at about N185 per litre at this time.

“But the price remained unchanged at N160 per litre because the Corporation has offered to pay the difference for Nigerians. For now, the government that has been managing the situation wisely because of its commitment to exterminate subsidy as requested by the World Bank is not disposed to discussing subsidy. It did not even make provision for it in the 2021 budget.

“However, the best way to go is Autogas. The Indigenous Gas Traders Association of Nigeria, INGASAN, an arm of IPMAN, has been meeting with the NGEP in recent times, and it has asked us to come up with the list of our members, having the capacity to provide Autogas services. We intend to company because gas is the way to go as the option comes with a lot of benefits to Nigeria .”

 “We need to work out acceptable ways and means that would encourage users to convert to their automobiles to autogas in the coming months.”

However, the Chairman, NGEP, Dr Mohammed Ibrahim, Chairman, had earlier said: “We need about 500, 000 conversion engineers in the next 90 days to ensure that the retrofitting of the vehicles go as planned. Fifty conversion centres are currently upgrading for mass conversion and training and over 30,000 vehicles are already running on dual fuels in Nigeria.”

The President, NLPGA, Mr Nuhu Yakubu, Nigeria Liquefied Petroleum Gas Association, NLPGA, who commended the Minister of State, Ministry of Petroleum Resources, Chief Timipre Sylva and the leadership of NGEP, on the recent Presidential directive to have government vehicles switched to  Autogas (LPG /CNG/LNG), had said: “This unprecedented pronouncement aligns Nigeria to the growing global adoption of environment-friendly and clean-burning fuels, such as gas.

“Without doubt, this laudable policy, which comes on the heels of the concerted and constructive efforts by the Honourable Minister of State, Petroleum Resources to revitalized gas-based industrialization propositions, is an exemplary achievement and significant step towards accelerated gas-inspired economic growth.”