TheCable

The federal government says it will begin the conversion of petrol-powered vehicles to autogas from March.

Timipre Sylva, minister of state for petroleum resources, disclosed this on Monday in Abuja during a meeting with oil marketers on the compressed natural gas (CNG)/autogas transition programme.

Sylva said the government was targeting to convert about five million cars at the end of the programme.

He said the government was out to ensure that it made available the alternatives required before petrol subsidy removal.

According to him, the deployment of autogas was one of such key alternatives.

President Muhammadu Buhari, had in December 2020, inaugurated the National Gas Expansion Programme (NGEP) which promotes the transition from petrol to gas for automobiles.

The federal government, through the Nigerian National Petroleum Company, during the roll-out of the program in Abuja, had assured of free conversion services in some selected retail stations to enable automobiles to switch from premium motor spirit (PMS) to autogas.

Speaking at the meeting, Sylva noted that with Nigeria’s abundant gas reserves of over 206.53 TCF, a population of about 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.

A presentation made during the event showed that the government would work with original equipment manufacturers (OEMs) and oil and gas marketers to convert one million public transport vehicles and install 1,000 refuelling centres within 36 months.

from the first to 18 months of implementation of the programme, 

According to the breakdown, 500,000 conversions would take place and 580 refuelling centres would be supplied by five OEMs for the first 18 months — while within 18-36 months, another 500,000 conversions and 420 refuelling centres supplied by six OEMs would materialise.

“Target is to reach 5,000,000 conversions by achieving a 20 percent y-o-y increment (from year 3) which could be accelerated as the market matures,” the document reads.

To fast track the implementation of the auto-gas initiative, the petroleum minister said the government has promised to provide 50 percent equity participation as well as encourage credit scheme investments with partner nations and Original Equipment Manufacturers (OEMs).

“So there will be some collaboration between you and the infrastructure fund to set things up for autogas conversation. We will bring out the fund along with some countries Original Equipment Manufacturers (OEMs) to hook up and assess,” he said.

“The burden will not be on you now, that is why we are bringing you on board, already the funding is in place to enable this aspect of your business.

“Government is coming in, we will provide 50 per cent of the funding while the country OEMs will provide another 50 per cent for you to assess. The programme will start in March.’’

Sylva said there must be critical amount of vehicles converted and a corresponding critical amount of dispensing stations before kick-off.

“If not, we will have a situation where converted vehicles will not have a place to refuel or stations not having converted vehicles to fill,” he said.

“The conversion process has been going on, and we have been talking to OEMs. To do this, we agreed that we needed to have one million vehicles converting in the first place.’’

According to Sylva, the OEMs would be in Nigeria soon and they would need partnerships with local marketers to put their systems in place in Nigeria, especially in the installation of the dispensing stations and also the conversion kits.