Nigeria: Fuel Subsidy - Govt, Stakeholders Advocate Shift to Autogas

15 January 2021

Against the possible return to fuel subsidy burden, the Federal Government may have begun moves to get the organised private sector to implement a shift to gas from petrol in powering automobiles.

An investigation by Vanguard shows that the Ministry of Petroleum Resources, through the National Gas Expansion Programme, NGEP, has already engaged with many stakeholders, including the Department of Petroleum Resources, DPR, Major Oil Marketers Association of Nigeria, MOMAN, and Independent Petroleum Marketers Association of Nigeria, IPMAN for this purpose.

The move, Vanguard learnt, became necessary as autogas is becoming increasingly cheaper while petrol prices are steadily going up.

Autogas is said to be currently about 60 per cent of the current price of petrol, which price could have hit the roofs at about N181.53 per litre, without government intervention through the Nigerian National Petroleum Corporation, NNPC.

In a telephone interview with Vanguard, the National Operation Controller, IPMAN, Mr. Mike Osatuyi, who confirmed the engagement with NGEP, said: "The price of crude has increased from about $40 to $55 per barrel in the global market.

"Consequently, the prices of petroleum products, including petrol, have also increased. In fact, if not for the NNPC, we should have been selling petrol at about N185 per litre at this time.

"But the price remained unchanged at N160 per litre because the Corporation has offered to pay the difference for Nigerians. For now, the government that has been managing the situation wisely because of its commitment to exterminate subsidy as requested by the World Bank, is not disposed to discussing subsidy. It did not even make provision for it in the 2021 budget.

"However, the best way to go is Autogas. The Indigenous Gas Traders Association of Nigeria, INGASAN, an arm of IPMAN, has been meeting with the NGEP in recent times, and it has asked us to come up with the list of our members having the capacity to provide Autogas services. We intend to comply because gas is the way to go, as the option comes with a lot of benefits to Nigeria."

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