By CHIKA IZUORA, FIDELIS UGBOMEH and ANDREW OJIEZEL, Lagos
Months after its launch, Nigerians are yet to fully embrace federal government’s auto gas policy, LEADERSHIP Sunday investigations have revealed.
The federal government has however reaffirmed its commitment to implementation of the policy despite concerns raised by stakeholders on the initiative.
The policy, the government said, is needed as subsidies on petrol cannot remain a major government consideration.
President Muhammadu Buhari had on December 1 last year launched the autogas policy which entails that vehicles using petrol will be redesigned to use gas.
Speaking in an exclusive interview with LEADERSHIP at the weekend, the chairman, National Gas Expansion Programme (NGEP), Mohammed Ibrahim, said a roadmap to actualise the initiative had been drawn and the country would witness a robust campaign to increase public confidence as the policy has a clear economic benefit.
On what has been achieved since the initiative was unveiled, he said it was a long term programme with potential economic benefits to the general economy capable of generating employment opportunities.
According to him, while the minister of state for petroleum resources, Timipre Sylva, and the group managing director of the Nigerian National Petroleum Corporation (NNPC), Mele Kyari, have given graphic economic and social benefits of the programme at different fora, the essential thing is for Nigerians to be a little patient for certain grey areas to be sorted out before the benefits would begin to flow.
“I have developed a workable model of this project in the last 15 years or more and I don’t see why it will not work. In the first place, the government cannot continue with the subsidies that are drying up public coffers, secondly we have abundant gas reserves which are capable of transforming the economy and as such we must allow it to work. We have no option than to make it work,” Ibrahim said.
He stated that the issue of procuring the conversion kit as reported is not a big challenge as government is seriously addressing it, adding that at the appropriate time the country would begin to see the opportunities play out.
Our correspondent reports that the federal government had projected that the auto gas scheme and increased domestic utilisation of Liquefied Petroleum Gas (LPG) would create about 12.5million direct and indirect jobs for Nigerians.
“We need about 500, 000 conversion engineers in the next 90 days to ensure that the retrofitting of the vehicles go on as planned. Fifty conversion centres are currently upgrading for mass conversion and training. Already, over 30,000 vehicles are already running on dual fuels in Nigeria,” Ibrahim said.
According to him, NGEP would also train 10 entrepreneurs from every local government area in the country in the areas of burners, cookers, accessories production, and development of MDCs.
He listed other benefits to include technology transfer for auto gas conversion among others.
“NGEP seeks to diversify the Nigerian economy from an oil-based one to one that encourages more production and utilisation of gas in the country. Nigeria has been described as a gas country with 203 trillion cubic feet proven gas reserve and, a potential of 600trillion cubic feet- although it currently has an output of just 22 metric tonnes per annum,” he said.
He said it would be impossible for Nigeria to replace fossil fuel with renewables as anticipated.
Clean, affordable and sustainable energy access is increasingly seen as a vital catalyst for wider social development including better health and education, these he said can be provided only with good government policy and regulatory frameworks.
Meanwhile, stakeholders in the automotive sector have expressed divergent views over the policy.
While some are of the opinion that the policy was not timely considering the fact that there is no assembly plant in the country currently assembling auto gas vehicles, others opined that the federal and state governments should kick start implementation of the policy by directing that all new and fairly used vehicles in convoys of government officials should be propelled by gas.
Kunle Adegemi, a motorist, supported the plan by government to encourage the use of gas to drive vehicles saying, “Most countries are now moving away from the use of petrol and diesel vehicles due to emission and its health implications compared to gas.”
He noted that the trend had currently changed as most countries now look for alternatives to fuel based on the fact that many have died due to pollution caused by petrol and diesel driven vehicles.
Also, Ayode Musbau, a Lagos resident, said the policy encourages the use of gas but that the necessary infrastructure like gas stations had not been put in place.
“It is true that it is less hazardous and cheaper to drive vehicles with gas, what happens to the existing vehicles on our roads using diesel and petrol?” He said.
A driver with Dangote Cement said there are trucks and other vehicles in the company’s fleet designed and powered by gas and diesel such that when gas is exhausted the diesel automatically picks up on motion.
He also pointed out that there are only a few individuals in the country who use gas powered vehicles, adding that what the government should do is to encourage private businessmen to establish gas stations where motorists can fill their tanks with gas.
On his part, Jonathan Ikhafia, an automobile expert, pointed out that the cost of converting existing petrol and diesel vehicles in the fleets of individuals, private and public organizations to gas had been put at N250 per vehicle, depending on the category.
He wondered how many Nigerians can afford to convert their vehicles from petrol or diesel to gas at the rate of N250,000, especially at this period when businesses are struggling to survive in the midst of poor electricity supply and constant increases in price of fuel.
According to him, the policy is ill-timed and not in the best interest of Nigerians who have been looking towards government for the provision of a conducive environment for businesses to thrive as well as create jobs for millions of Nigerians.
The Manufacturers Association of Nigeria (MAN) described it as a laudable policy that would generate jobs, especially for those in the auto sector.
The president of MAN, Ahmed Mansur, while speaking with our correspondent, also described the policy as one of the federal government’s policies that can help fast-track the recovery of the economy after COVID-19.
“It will help to improve transportation if well managed. I will call on the Ministry of Transportation, as it is already doing a lot in that direction, to intensify efforts to ensure the availability of gas for use. It will help in job creation; it is a good policy.”
However, some auto dealers described the policy as not achievable one.
Speaking with our correspondent, the dealers who pleaded anonymity said: “We have some cars that are high bleeds which are made to use spare or last drops of fuel to serve them. Now, converting such will only be a wasted effort.
“How can they now want to force payment of N250,000 on us? This too will not work because it is government idea and not our idea to convert vehicles. Since it is their plan, then, they should also bear the cost rather than trying to make us to pay.”
The National Automotive Industry Development Plan (NAIDP) has, based on the National Automotive Policy, set tariffs at a maximum of 70% (35% plus 35% levy) for new imported fully built up cars and 35% duty without levy for commercial vehicles.
According to the policy, the level will decrease, as the local automotive sector grows and becomes competitive, thus Completely Knocked Down Parts (CKD) and Semi Knocked Down Parts (SKD) are currently charged 0% and 5-10% duty so as to encourage local assembly of vehicles.
The objective of this policy is to encourage establishment of local vehicle assembly plants that source most of their local content within the country and by extension local manufacture of vehicles.
Also, an assembly plant may start operation with SKD2 assembly and move to SKD1, CKD and finally assembly operations or skip some of the phases of assembly operations within a period of 54 months.