Nigeria considers compulsory installation of CNG pumps at fuel stations

The Federal Government may deny petroleum marketers licenses if they fail to include fuel pumps that would supply compressed natural gas (CNG).

The Nigerian Midstream Downstream Petroleum Regulatory Authority (NMDPRA) said, yesterday, in Abuja that approval for fuel stations would be based on the provision of CNG infrastructure to enable the autogas policy to succeed.

Coming weeks after the agency fixed the price of CNG at $1.57 per million British thermal units (MMBTU) ahead of the rollout of auto-gas vehicles by the current administration, Chief Executive of NMDPRA, Ahmed Farouk, said CNG must be available in most new coming and larger petrol stations just like petrol, diesel and kerosene for easier access to the consumers.

Speaking after a meeting with marketers, supply challenges relating to the discharging of petroleum products from mother to land led to the recent scarcity witnessed in the country.

“Luckily, it has been addressed, and most of the cities in the country have gone back to normal in terms of supply.

The other issue we discussed is the CNG revolution and we put a collective effort to ensure we reduce the burden on the economy by having an alternative to PMS which is very costly especially due to the exchange rate instability. We are looking at gas. We have gas in abundance. We have over 200 trillion cubits of proven gas reserves. All we need is to harness the industry to produce, invest, and of course to be affordable for the consumers,” he said.

Farouk insisted that the industry must play collective responsibility to turn to CNG by addressing supply-side issues, especially leveraging local producers.

Farouk said there is a need for the product to be available at a competitive cost to the consumers in order to transform into a CNG-driven economy for the transport sector.

He hinted at the need to decarbonise the downstream segment of the industry ensuring that depots and retail outlets adopt solar.

“We are exploring the possibility of converting the energy requirement of some of the retail outlets and depots by the stakeholders to solar but there is a high entry cost and we have also discussed that, so it is going to be in phases.

“By doing so, we reduce the dependence on diesel in terms of powering our generators by utilising the solar option. It is something we have discussed,” Farouk said.

He said the unknown actual consumption figure in the country is worrisome, adding that the industry is planning to install trackers on all tankers to determine products that end up at the retail stations.

Despite the Dangote refinery, Farouk the agency sees the need to enable marketers to import petroleum products especially diesel and available fuel.

“As \an oil-producing country, we believe that we should support our local industries, which is why we encourage our marketers to patronise our local industries. At the same time, it is a commercial decision they must make between the supplier and then the consumer, marketers or the client. NMDPRA would not determine how much is sold or the price you are selling or buying, just as any other market, it is a matter of supply and demand,” he noted.

It is their own decision to go to Dangote refinery to purchase or for Dangote refinery to determine the price they sell. We, as regulators, are interested in ensuring the nation is well-supplied to prevent any supply gap. These are the issues we have discussed.

Reacting to the inability of marketers to bring in products despite getting over 90 licenses, Managing Director of Matrix Services Limited, Abdulkabir Aliu, said the decision of the federal government supersedes the marketers’ plan.

“We are all in alignment with the decision of the federal government. I think Nigerians should be patient. It is less than a year since the decision was taken, and we are beginning to see the plan. You can also see that we have a refinery that is operating, and we are also expecting more refineries to come onshore in a period,” he said.

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