See how much transporters will save as FG offers 50% subsidy to convert vehicles

2 months ago 15

The Nigerian government has provided subsidies to accelerate the adoption of CNG, encouraging more transporters to use it
Motorists have consistently complained about the high cost of converting their vehicles from petrol to the cheaper fuel alternative
The latest move by the federal government is set to help transporters save up to N300,000 spent on fuel monthly

Legit.ng journalist Dave Ibemere has over a decade of business journalism experience with in-depth knowledge of the Nigerian economy, stocks, and general market trends.

The Federal Government has announced that it is ready to subsidize the cost of converting vehicles running on Premium Motor Spirit, popularly called petrol, to Compressed Natural Gas for transporters.

The decision is in a bid to accelerate the adoption of CNG in the country which is far cheaper compared to petrol.

What is CNG?

CNG is a fuel gas under pressure that remains clear, odourless and non-corrosive, an alternative to petrol.

According to Nagendra Verma, the managing director of NIPCO Gas, AutoGas for cars, taxis and tricycles is being sold at about N200 per standard cubic foot, while for heavy commercial vehicles, CNG is sold at N260 per standard cubic meter (SCM).

FG offers 50% subsidy

Punch reports that the Federal Government gave the commitment to help transporters in a meeting on Thursday, June 27.

The meeting was organised by the Presidential Compressed Natural Gas Initiative (P-CNGI) and Portland Gas Limited in partnership with the National Agency for Science and Engineering Infrastructure, the Programme Director, P-CNGI, Michael Oluwagbemi.

At the meeting, Michael Oluwagbemi, P-CNGI Programme Director, called for sustainable transportation through CNG adoption.

The transporters revealed that it would cost between N1.2 million and N1.5 million for the kits required to convert the petrol or diesel-powered vehicle to start running on CNG.

In response, Oluwagbemi, who spoke through an official of P-CNGI, Tosin Coker, assured transporters and other stakeholders at the meeting that the Federal Government would shoulder 50 per of this cost, which is between N600,000 and N750,000 per transporter.

He stated:

“To reduce the cost of public transport, we are catalysing the sector by supporting the introduction of CNG buses and tricycles (Keke). "In the next days you will witness these buses on the streets of Abuja, even as we also start to make conversion kits available at 50 per cent discount to the transport sector,”

The expected impact of CNG

Speaking at the engagement the managing director of Portland Gas, Folajimi Mohammed, said with CNG, a motorist will spend less monthly.

He explains:

"Transporter or otherwise, who currently consumes on average N14,000 worth of petrol daily would have this cost significantly reduced to N3,111 with CNG and that would result a savings of N326,670 monthly in addition to improving on millage."