Stakeholders have urged the Federal Government to come up with incentives that will boost private sector investment in converting fuel stations to support gas-fired vehicles across the country.
This, they believed, would lure investors to build Compressed Natural Gas (CNG) pipeline networks. Some analysts are of the opinion that this could be done by ensuring adequate margins, tax holiday, and duty waivers.
“When you convert a car from using both gasoline and CNG, there is a cost involved. The government can help the growth or expansion of such by helping to absorb the cost,” Adetunji Oyebanji, president of Major Oil Marketers Association of Nigeria, (MOMAN), told Businessday.
The MOMAN president said “this can be done by the government paying or refunding the company doing the conversion. This can be a cash payment, credit, tax relief, reduction in the price of gas to create a margin to cover the cost of conversion. So these are different methods to ensure the cost is recovered.”
READ ALSO: FGM; UNICEF to train police, other stakeholders in Ebonyi
Businessday findings showed that despite applauding government’s initiative by private car and commercial bus owners who have converted their engines to use both petrol and natural gas, the refuelling stations and cost of conversion of such vehicles have remained major hurdles not adequately filled.
The Federal Government had earlier declared the year 2020, however, the sector is yet to attract the massive investment that is required for the optimal advancement of the sector.
Senior government officials have described autogas as cheap, available, affordable and accessing, adding that it was less expensive than petrol or diesel in many countries.
Technical assistant to the minister of state for petroleum resources on gas business and policy, Justice Derefaka told Businessday that autogas used as an engine fuel was the most accepted alternative fuel in the world today.
It was gathered that global consumption of liquefied petroleum gas as engine fuel, primarily autogas, has been rising in recent years, reaching 26.7 million tons in 2016.
Speaking on cost implication of converting vehicles to start using autogas Derefaka said: “The cost was between N190,000 and N250 000 depending on the vehicle. However, rickety vehicle cannot partake in this.
“When the PMS seems at N161, you will have autogas at a range of N75 to N80. And monthly savings for 100km daily shuttle is around N46,000. Monthly savings for 50km daily shuttle is about N23,000.
