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FG Considers Financial Support For Fuel Marketers To Install CNG Pumps At Filling Stations

The Federal Government is contemplating helping independent fuel marketers finance the installation of Compressed Natural Gas (CNG) sales pumps at filling stations nationwide.

Naija News reports that this initiative follows concerns raised by the Independent Petroleum Marketers Association of Nigeria (IPMAN) regarding the high costs associated with installing these pumps, as mandated by a presidential directive to promote the CNG initiative.

During an interview with Punch Newspaper, the Public Relations Officer of IPMAN, Chinedu Ukadike, voiced the challenges faced by marketers due to prohibitive installation costs and high interest rates from banks.

He suggested the establishment of an ‘energy bank’ to provide more accessible loans for marketers.

He said, “Compressed Natural Gas is a welcome development. In the last meeting held with the Nigerian Midstream and Downstream Petroleum Regulatory Authority, we were advised to install pumps and tanks as an add-on to our stations. We raised concerns about the licensing of the add-on and the conversion centre. The government had agreed that some of our filling stations would be used as conversion points for CNG vehicles. Unfortunately, we are still not aware of the next plan to commence this process to integrate independent marketers into the CNG programme.

“On the financing part, some banks had approached us and have mapped out some money for this kind of venture, but I also believe that there should be a microfinance bank set up by the government to help marketers engage in this venture. We have also advocated for an energy or petroleum bank, just like we have the Bank of Industry and Bank of Agriculture, where marketers can seamlessly obtain loans without any extra charges or high interest rates.

“The interest rates in commercial banks are burning our business. We cannot source fresh capital to fund this venture from them, and that is why we need the government’s assistance. We are already spending a lot on distributing petroleum products.”

When asked if the marketers needed government assistance to install CNG pumps, he said, “Yes, we definitely would appreciate it if the government could assist us.

In response to President Bola Tinubu’s commitment to end the fuel subsidy era and promote CNG as an alternative fuel, the Federal Government announced plans to launch the CNG initiative before the President’s first anniversary in office.

According to Bayo Onanuga, a presidential aide, over 600 CNG-powered buses and numerous tricycles will be deployed as part of this initiative’s first phase.

Furthermore, the Nigerian Midstream and Downstream Petroleum Regulatory Authority, led by CEO Farouk Ahmed, has mandated oil marketing companies to incorporate CNG pumps in new filling stations as a prerequisite for obtaining government approval.

Addressing the financial concerns, Michael Oluwagbemi, Programme Director/CEO of the Presidential Compressed Natural Gas Initiative, indicated that the government would examine the possibility of providing targeted financial assistance to marketers.

He emphasized that while existing government interventions and funds are accessible for infrastructure enhancement, a specific sub-fund for CNG installations could be considered.

The transition to CNG is also gaining traction among transport unions.

The Road Transport Employers’ Association of Nigeria and the National Union of Road Transport Workers have called for government support to facilitate the conversion of vehicles to CNG, highlighting the environmental and economic benefits of this alternative fuel.

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