As the demand for palliatives rises following the removal of subsidies, analysts believe that now is the opportune time to implement Nigeria's N250bn auto gas intervention Fund, a critical component of the country's autogas policy.
President Bola Tinubu has been cautious about disbursing cash to millions of Nigerians as palliatives, as doubts loom over the credibility of a national register. Analysts caution that such a plan could exacerbate the already soaring inflation, which has reached double digits.
To address the situation effectively, experts stress the need for a comprehensive and inclusive palliative program that supports people living in poverty without harming the economy. They assert that intervening in the transport sector to assist people in their mobility would yield the most value.
The autogas project, launched in December 2020, aims to reduce Nigeria's heavy reliance on petrol and promote gas as a cleaner and more affordable vehicle energy source. Initially, the government planned to convert up to one million vehicles, primarily passenger and haulage vehicles, to run on Nigerian roads as pilots by the end of 2021. However, this target has not been achieved.
Insiders familiar with the program have revealed that accessing the CBN intervention fund has been a daunting task. Kelvin Emmanuel, CEO of Dairy Hills Limited, highlighted the fund's inconsistencies and lack of transparency. He urged for real changes in the form of deregulation of gas prices, a review of the requirements for securing gas offtake agreements from Nigeria Gas Marketing Company, and an increase in the number of midstream high-pressure transmission pipes for easy offtake and distribution.
At the sixth Nigeria International Energy Summit in Abuja, Gabriel Aduda, permanent secretary of the Ministry of Petroleum Resources, reported that over 1,000 vehicles had been converted to autogas, with a majority being government-owned. However, there are concerns about why the project has fallen short of expectations, given its potential to leverage Nigeria's abundant gas reserves.
The Nigerian Association of Liquefied Petroleum Gas Marketers, the Independent Petroleum Marketers Association of Nigeria (IPAMAN), and the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) confirmed that none of their members had accessed the N250bn fund. IPMAN is demanding immediate access to the intervention fund, viewing it as a viable alternative to petrol, especially after the exit of the subsidy regime by President Bola Tinubu.
As the country grapples with the challenges posed by subsidy removal and increasing demand for palliatives, the effective implementation of the N250bn auto gas intervention Fund becomes even more critical. Addressing the issues surrounding fund accessibility and transparency will be vital to successfully promoting the use of gas as a cleaner and more sustainable energy source for vehicles in Nigeria.
