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CBN N250b gas expansion programme can settle subsidy crisis – Consumers, marketers


By John Ofikhenua, Abuja

Marketers under the umbrella of the Independent Petroleum Marketers Association of Nigeria (IPMAN) have said the N250 billion Central Bank of Nigeria (CBN) Gas Expansion programme can settle the perennial crisis over the petrol subsidy.

Its National Vice President, Alhaji Abubakar Maigandi, who disclosed this to The Nation, said an implementation of the programme can reduce Nigeria’s reliance on petrol and its associated challenges.

The Gas Expansion Programme, according to the apex bank, is to support players in the industry to produce and distribute more gas.

The gas includes: Compressed Natural Gas for fuelling vehicles, especially the passenger ones and the Liquidfied Natural Gas (LNG) for domestic has utilization.

Describing the initiative as apt, the National Vice President said with the implementation, transporters can have alternative to their choice of petrol.

According to him: “That CBN intervention programme is a very good one provided it can be distributed to marketers to expand their gas businesses as the government is planning to reduce dependence on petrol and remove subsidy”.

He added that even though his members are yet to access the fund, the association has been holding meetings with the CBN on how to access it.

President, Consumer Protection Network, Barrister Kola Olubiyo, who also spoke in a telephone conversation with our Abuja correspondent, depicted the CBN intervention programme as right step in the right direction.

He noted it will bring to an end the perennial crisis over fuel subsidy.

The activist said: “The issue of fuel subsidy and its attendant crisis will be taken out. So, it is a welcome development”.

With the ever rising price of petrol, marketers and consumers are always apprehensive about the landing cost of the product.

This is so because, aside the cost of crude oil, there are other factors that influence its market.

At the moment there is little or no refining of the product in-country.

It makes importation of petrol a sane quo non to meet the 56 million litres per day consumption in Nigeria.

Although all marketers are at liberty to import the product, the Nigerian National Petroleum Corporation (NNPC) remains its sole importer as a result of high cost of exchange rate.

Since Nigeria depends on importation, whatever gain it would have recorded from soaring crude oil prices always turns out to be a curse owing to the pressure it exerts on petrol prices.

Having deregulated the petrol market since last year, the gap between the landing cost and an affordable price remains unbearable to the consumers, who pride themselves as citizenry of an oil producing country that should not sweat to pay for petrol.

Thus, the Federal Government has resolved to bear the cost of under recovery of the product in the absence of a budgetary provision for a subsidy support.

As the government is planning to relieve itself the burden of subsidy payment, it has mulled an alternative for cushioning the harsh effects of subsidy removal.

Chiefly among its planned palliatives is the provision of the Liquidfied Natural Gas (LNG) and LPG for fuelling commercial passengers buses or vehicles. According to the Minister of State for Petroleum Resources, Chief Timipre Sylva, the gas for fuelling vehicles is far cheaper than petrol. Besides, it is environment friendly in terms of carbon emission.

On this note, the CBN last year approved N250 billion gas expansion programme to support players in the industry to produce and distribute more gas.

The framework for the implementation of the intervention facility was predicated on the proven gas reserves of 188 trillion cubic feet (tcf) of gas, and with proven deposit standing at over 203 trillion standard cubic feet.

The consumers and marketers are upbeat that access to the facility will not only deepen gas for fuelling vehicles in the country, it will save the environment from pollution and settle the petrol subsidy controversy forever.



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