Economy Politics

FG to replace fuel with Compressed Natural Gas to escape subsidy payment

FG deregulated downstream oil sector, takes out Subsidy off PMS in March — Sylva
Written by Maritime First

The Minister of State for Petroleum Resources, Timipre Sylva has announced Federal Government plans to adopt the use of Compressed Natural Gas (CNG) in place of fuel, in order to stop subsidy payment.

Sylva indicated this while briefing newsmen in Abuja on Wednesday.

The CNG is a fuel that can be used in place of gasoline, diesel fuel and liquefied petroleum gas (LPG), more so, because CNG combustion produces fewer undesirable gases than the aforementioned fuels.

Sylva who said that government was set to discourage the use of Premium Motor Spirit PMS also known as petrol for transportation, especially for commercial purposes, noting that the payment of subsidy on petrol was taking a toll on the finances of the country, hence, government’s decision to encourage Nigerians to adopt CNG as transportation fuel.

The minister of state noted that government had over the years done a pilot scheme on CNG in Benin City, and it had proven that it would go a long way in serving as an alternative to fuel if expanded to the entire country.

According to him, while PMS at subsidised price goes for N143 per liter, CNG goes for between N95 and  N97 per liter

“We will start very soon to roll out. Already, there is a pilot programme in Benin, which has worked for a long time.

About 4,000 vehicles are already on CNG in Benin.

“We want to expand that CNG programme across the country and we believe it is going to create a lot of opportunities for Nigerians and also give Nigerians a new lease of life because the commodity would be accessible,’’ he said.

Sylva said that the Ministry would focus on two key areas in 2020 to help in the stabilising the oil and gas sector and move it to the next level.

He said that government would support all efforts to ensure the increase in crude oil  production level.

Also read:  Fuel subsidy to gulp N450 bn in 2020 -‘ -finance minister

According to him, the country currently produces about 1.774 million Barrel Per Day (BPD) which is still far behind the target.

“Few years ago, we produced more  than two million barrels per day but we are projecting three million barrels and ultimately to get to four million bpd.

The United Arab Emirate used to produce 2.7 million bpd but today, they have moved to four million per day.

“We have gone back, today, according to OPEC report, we are producing 1.774 million bpd. You can see the need for us to move forward and that is actually the mandate of President Muhammadu Buhari to us,’’ he said.

He added that the ministry would ensure improved relationship between industry stakeholders and the common man on the street by ensuring accessibility of petroleum products.

The minister of state said that the ministry would also in 2020 focus on tackling the insecurity challenge around oil and gas facilities in the country.

“Crude oil theft is being contained with strong legislation but it has continued to linger, this is because of lack of community inclusion.

“Our recommendation will be use of technology, community participation, Engagement of Petroleum Technology Institute (PTI) and infrastructure development in the Niger Delta region among others,’’ he said.


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Maritime First