Energy experts have urged the government to address inherent challenges as the Federal Government banks on intervention by the Central Bank of Nigeria to implement the National Gas Expansion Programme and National Autogas Roll-out Initiative.
While the CBN had introduced a N250 billion intervention fund under the National Gas Expansion Programme, Minister of State for Petroleum Resources, Timipre Sylva, had disclosed that the government would work with the Central Bank of Nigeria (CBN) to ensure full implementation of the AutoGas Policy.
CBN had in gas policy framework said the low level of investment was hindering domestic gas consumption, adding that they would stimulate production and utilization of Compressed Natural Gas (CNG) and Liquefied Petroleum Gas (LPG) as clean alternative sources.
“We are working right now with the Central Bank of Nigeria to ensure that we are able to bring in conversion kits for a critical mass of vehicles.
“And then also give soft loans at the same time to downstream operators to fix their filling stations, so that when we fit the two together, it will work.
“In many cases, government interventions are quite critical in controlling the cost of borrowing in developing sectors. The CBN intervention remains a positive tool for the development of the domestic gas sector,” he said.
While reacting to the development, A representative of PriceWaterCoopers(PwC), Habeeb Jaiyeoba said that government interventions are being used to catalyze economic development across the world
Jaiyeola, however, noted that the payback has to be enforced to ensure the fund remains available for further critical interventions, adding that further sensitization on the autogas initiative would be needed for its acceptability.
“This is a highly technical area where safety is of high importance especially where a mechanical item is made to run on fuel feedstock different from its original design.
“The global acceptability of this needs to be obtained, especially from the original manufacturers.
Possible negative impact needs to be identified as well to enable informed decision prior to implementation,” he added.
Speaking also, An energy expert, Michael Faniran noted that one of the imperatives of the autogas policy remained the need for people to convert their vehicles so that they could use both petrol and gas.
“This is an additional cost to the vehicle owners. As such, government needs to create incentives aimed at vehicle owners, in the form of loans or tax credits, to offset part or all of the cost of conversion of vehicles and even for retail outlets to build dispensing units for CNG.
“The intervention by the CBN is a welcome idea as it will jumpstart the adoption of the autogas by vehicle owners and retail outlets, and also build critical market mass. However, this is not sustainable,” Faniran noted.
He insisted that there was a need for a public-private partnership (PPP) type of fund to finance the vehicle and retail outlets conversion kits to guarantee sustainability, adding that the CBN could disburse the funds through a special purpose vehicle with private sector players.
Faniran also stated that there must be a very clear enabling policy and the government must have a well-thought-out and bankable plan to attract the private sector.
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