Oil marketers announced on Wednesday that adopting Compressed Natural Gas (CNG) in vehicles will result in savings of over 400% compared to Premium Motor Spirit (petrol), commonly known as petrol.
Shortly after President Bola Tinubu’s inaugural address on May 29, 2023, where he declared the removal of the petrol subsidy, the subsidy was eliminated in less than two days. This decision caused the pump price of petrol to skyrocket from N198 per liter to an average of over N540 per liter nationwide, leading to increased prices of goods and services nationwide.
In response to the escalating costs, oil marketers have been actively seeking alternatives to petrol. They have emphasized that transitioning from PMS to CNG will significantly reduce the financial burden currently borne by Nigerians for fuel expenses.
“What we are saying is that by the time CNG is deployed, it will take off at least 400 percent of what we are paying for fuel now,” the National President Independent Petroleum Marketers Association of Nigeria, Chinedu Okonkwo, stated.
He added, “And if you check this 400 percent, it means that the cost of CNG that will deliver what one liter of petrol is going to deliver should be less than N110 anywhere in Nigeria, whereas PMS is sold at over N540//litre.
“That is what we are saying, and this is based on the current open market exchange rate because we are not using the former official rate of the Central Bank of Nigeria; rather, we are using the parallel market calculation. So floating the forex does not affect our calculations.”
Regarding the discussions between marketers and the new government regarding the implementation of CNG, Okonkwo informed our correspondent that IPMAN (Independent Petroleum Marketers Association of Nigeria) and other oil dealers had actively approached the current administration to address this matter.
He said, “We are talking with them. Government is a continuum. We are still talking with this new government, and we hope the meeting between them and labor will yield desired results.
“You know, part of their (labor) demand is that the government should include CNG into the energy mix. Once that is given and followed, it will give us a better trajectory.”
On June 19, 2023, the Nigerian Federal Government announced the establishment of a steering committee tasked with examining the various demands presented by organized labor unions. One of the demands put forward by the labor centers is the conversion of vehicles to operate on Compressed Natural Gas (CNG). The steering committee has been assigned to develop a practical framework for this conversion process, with a deadline of August 14, 2023.
After a meeting held at the State House in Abuja, the Special Adviser to the President on Communications, Special Duties, and Strategy, Dele Alake, along with the Presidents of the Nigerian Labour Congress and Trade Union of Nigeria, Joe Ajaero and Festus Osifo respectively, briefed journalists separately on this development.