By Tosin Olatokunbo
The federal government has disclosed plan to convert 5 million petrol powered vehicles to Autogas. The Minister of state for Petroleum Timipre Silva made this known in Abuja on Monday.
The minister said the government would ensure there are alternatives before the removal of petrol subsidy, adding that the deployment of autogas was one of such key alternatives.
The development comes after the President Muhammadu Buhari administration retracted its earlier decision to remove petrol subsidy by the end of June this year.
The Minister of Finance, Budget and Economic Planning, Zainab Ahmed said during a meeting with Senate President, Ahmad Lawan yesterday that the administration had no intention of ending the subsidy regime anytime soon.
Sylva who spoke during a meeting with oil marketers on the compressed natural gas, CNG/autogas transition programme said the conversion process will take off by March this year.
The minister said during his presentation that the 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”.
To fast track the implementation of the auto-gas initiative, the petroleum minister said the government will provide 50 percent equity participation, apart from encouraging credit scheme investments with Original Equipment Manufacturers, OEMs.
According to him, “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 explained that the federal government will bear the cost of the conversion for the immediate term, adding that efforts would be geared towards ensuring that many vehicles are concerted within the time frame as well as the availability of fuel stations where such vehicles will be refueled.
Sylva 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.”
The federal government would try as much as possible to prevent 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,’’ the minister said.
Meantime, the minister of Finance said on Monday that the federal government decided to rescind its earlier decision to end the petrol subsidy regime because of the impact such action will have on many Nigerians.
Zinab said “We discovered that practically, there is still heightened inflation and that the removal of subsidy would further worsen the situation and impose more difficulties on the citizenry.
“Mr. President (Muhammadu Buhari), does not want to do that. What we are now doing is to continue with the ongoing discussions and consultations in terms of putting in place a number of measures.
“One of these include the roll out of the refining capacities of the existing refineries and the new ones which would reduce amount of products that would be imported into the country”.
