Subsidy Removal: Nigerians, Oil Marketers In Search Of Cheaper Alternative, Expert Calls For Investment In Gas Sector

Sequel to the sudden declaration of the end of the fuel subsidy regime in the country in May, several conversations have been ongoing about how to cushion the effect of the removal, as well as other cheaper alternatives to the use of Premium Motor Spirit (PMS), also known as petrol.

Recall that President Bola Tinubu had on his inauguration day declared an end to the fuel subsidy regime in the country, a development that has spurred several controversies.

A declaration that led to the upward review of the pump price of petrol from N184 per litre to over N500 per litre by the Nigerian National Petrol Company (NNPC) Limited.

While some stakeholders have praised the move, others like the Nigeria Labour Party ( NLC), have kicked against the removal, saying implementation of palliative should have been in place before the move.

In the wake of deregulating the oil sector, industry experts have begun looking for cheaper alternatives to the use of petrol, and a major alternative being eyed now is gas.

Naija News gathered from industry experts that while the downstream oil sector is just facing deregulation of the market, the gas sector has been deregulated already.

Speaking to our reporter in an interview, the Executive Secretary/CEO of the Nigerian Association of LPG Marketers (NALPGAM), Bassey Essien said while the removal of the fuel subsidy might sound harsh, it is a good avenue for Nigerians to begin to look inward towards gas.

He said beyond cooking, Nigerians should begin to see gas as an affordable alternative to petrol for Nigerians to power their automobile, generators and others.

The NALPGAM Executive Secretary, who pointed out that with the situation on the ground, people would begin to look into the diversification of their source of energy, explained that gas is more economical and last much longer, a reason it would interest people more.

According to him, the sudden removal got people unawares, so it has created some level of hardship, citing how exorbitant transportation fares have become due to the new development.

Admitting the hardship the subsidy removal would bring, President Tinubu in his Democracy Day address on June 12 said “I feel your pain. This is one decision we must bear to save our country from going under and take our resources away from the stranglehold of a few unpatriotic elements.

“It is for this reason that, in my inauguration address on May 29, I gave effect to the decision taken by my predecessor-in-office to remove the fuel subsidy albatross and free up for collective use the much-needed resources, which had hitherto been pocketed by a few rich.

“I admit that the decision will impose an extra burden on the masses of our people. Painfully, I have asked you, my compatriots, to sacrifice a little more for the survival of our country.

“For your trust and belief in us, I assure you that your sacrifice shall not be in vain. The government I lead will repay you through massive investment in transportation infrastructure, education, regular power supply, healthcare, and other public utilities that will improve the quality of lives.”

Naija News had earlier reported that a trending video of a generator using cooking gas in place of fuel has surfaced on social media following the removal of the fuel subsidy.

Some Nigerians, however, have sourced for alternatives to ease the increasing hardship in the country by tweaking their generator engine and depending on the use of cooking gas to light up their businesses.

In the trending video on social media, a yet-be-identified business owner shared a video showing the moment a generator using cooking gas was used to power his business.

While some oil marketers have said they have the numerical strength to beat down the pump price of petrol when they start the independent import of the product, others have intensified their campaign for Compressed Natural Gas (CNG) as alternative automotive fuel.

The national president of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Elder Chinedu Okoronkwo, said the Association is 90 per cent ready to roll out CNG as alternative automotive fuel, which it is going to sell between N100 to N110 per litre before the end of June.

According to him, CNG would help bring down the cost of energy in the country, adding, “Very soon, we will roll out. We are 90% close to that, and that will also unveil many possibilities.”

Okoronkwo, who made this disclosure when he was featured on Channels Television’s Business Morning programme last Monday, explained that “IPMAN has brought relief to a lot of families. We have got the usage of our natural energy, CNG, to power vehicles, generators, and even cooking.

“If the government buys into what we are saying, it will act as an assistance, bring relief, and create job opportunities.

“What we need the government to do is create the market. The demand is there.”

Throwing more light on the value chain of the CNG, the IPMAN boss noted that “I don’t know if you have seen what is trending this week where people with their I-pass-my- neighbour generators are beginning to use liquified petroleum gas. LPG is close to N700 per kilogramme, but this natural gas we are talking about is under N100 to N110.

“When you check what the impact will be, it will reduce the cost of food because people coming from the hinterlands bring food to the cities. From Kano, it takes them about N1.2 million to fuel trucks with diesel, but with this CNG, it will cost them about N150,000 to N200,000. About a million naira is saved which will translate to cheaper food and open up a lot of other businesses.

“It will provide cheaper energy to drive the processing zones like the agro-based industries, where the gas will also create a lot of impacts.

“CNG does not replace PMS, but it is a choice. We are talking of something that will help your purse and not deepen it.”

Meanwhile, Bassey told Naija News that ”With the pronunciation of the deepening of gas in the last government, we have all said that if we want to industries to the level we are talking about, gas is the catalyst for that industrialisation. 

”We will see investment coming in the sector depending on government policies concerning the sector. If its friendly investors are expected because it is an area that has not seen enough growth and we think that, if the conditions are right and security is taken care of, definitely, we will see investments coming in.”

Speaking further about how the subsidy removal can lead to the boom of the gas sector, he observed that ”We have not even consumed what we have as a reserve, so we need to harness that and investment have to come in. With the rapid development in the sector, we believe that investment would certainly come.”

Talking about Nigeria’s capacity to meet the potential local market if eventually gas becomes the cheaper household alternative, the NALPGAM CEO maintained that the country has lots of gas reserves to cater for domestic consumption if exports are not made.

He stated ”We have enough gas, but the point is that we don’t have enough investment, and if we are going by converting what we have to what we need. Even in the worst production of gas locally without exporting can cater to a greater extent for our domestic consumption.”