CBN To Fund CNG Infrastructure With N250bn
The Central Bank of Nigeria (CBN) will make N250 billion available for infrastructure funding in a bid to expand gas use and cut reliance on imported fuel as government looks forward to offering free conversion to enable some cars to run on gas, it was gathered said yesterday.
Nigeria, Africa’s largest oil exporter is hoping to have one million gas-powered cars by 2021, and convert about 40 per cent of its fleet within 10 years.
The plan, launched by President Muhammadu Buhari, is part of the country’s effort to free itself of costly gasoline subsidies while avoiding public anger over higher fuel pump prices.
The COVID-19 pandemic has slammed oil prices, which provide 90per cent of Nigeria’s foreign exchange and more than half of its budget.
“These developments have made it imperative to focus on gas as an alternative fuel,” Buhari said via video link to the event.
The Federal Government removed gasoline pump price controls earlier this year, but is still setting prices ex-depot, which has made it difficult for private companies to import fuel. NNPC’s oil refineries were completely shut down earlier this year in advance of hoped-for overhauls, leaving the nation entirely dependent on imported fuel.
The group Managing Director, Nigerian National Petroleum Corporation (NNPC), Mele Kyari said select NNPC stations across the country will offer free conversion of “some cars” to enable them to run on liquefied petroleum gas (LPG) or compressed natural gas (CNG). There are currently 80 locations in the country capable of fuelling the vehicles.
Nigeria has the world’s ninth-largest gas reserves, and vehicles that run on gas are generally cleaner and better for the environment. But gas must be cool or pressurised for distribution, and the infrastructure for transporting, processing and distributing it would cost billions of dollars.