The federal government says it will start converting gasoline-powered vehicles to autogas in March.
Timipre Sylva, the minister of state for petroleum resources, made the announcement on Monday in Abuja during a meeting with oil marketers about the compressed natural gas (CNG)/autogas transition program.
Sylva stated that the government hoped to convert approximately five million cars by the end of the program.
He stated that the government was working hard to ensure that the necessary alternatives were available prior to the removal of the gasoline subsidy.
One of these key alternatives, he claimed, was the use of autogas.
President Muhammadu Buhari launched the National Gas Expansion Programme (NGEP) in December 2020 to promote the transition of automobiles from petrol to gas.
During the program’s roll-out in Abuja, the federal government, through the Nigerian National Petroleum Company, assured of free conversion services in some selected retail stations to enable automobiles to switch from premium motor spirit (PMS) to autogas.
Sylva stated at the meeting that with Nigeria’s abundant gas reserves of over 206.53 TCF, a population of approximately 200 million people, and the enactment of the Petroleum Industry Act, the continuous absorption of an under-recovery deficit would be eliminated when the alternative fuel comes on-stream.
During the event, the government stated that it would work with original equipment manufacturers (OEMs) and oil and gas marketers to convert one million public transportation vehicles and install 1,000 refueling stations within 36 months from the first to the last 18 months of the program’s implementation.
According to the breakdown, the first 18 months would see 500,000 conversions and 580 refueling stations supplied by five OEMs, followed by another 500,000 conversions and 420 refueling stations supplied by six OEMs within the next 18-36 months.
“Target is to reach 5,000,000 conversions by achieving a 20% year-on-year increase (from year 3), which could be accelerated as the market matures,” according to the document.
“As a result, you and the infrastructure fund will work together to get things ready for the autogas conversation.” “We will bring out the fund in collaboration with some countries’ Original Equipment Manufacturers (OEMs) to connect and assess,” he said.
“The burden will not be on you now, which is why we are bringing you on board; funding is already in place to enable this aspect of your business.”
“The government is coming in; we will provide 50% of the funding, while the country’s OEMs will provide the remaining 50% for you to evaluate.” “The program will begin in March.”
Before kick-off, Sylva stated that a critical number of vehicles must be converted, as well as a critical number of dispensing stations.
“The conversion process has been ongoing, and we have been in contact with OEMs.” To accomplish this, we agreed that we needed one million vehicles to convert in the first place.”
According to Sylva, the OEMs would be in Nigeria soon and would require partnerships with local marketers to put their systems in place, particularly in the installation of dispensing stations and conversion kits.