President Bola Tinubu recently revealed in a nationwide address that Nigeria spends N2 trillion monthly on the importation of petrol and diesel.
Despite Nigeria’s rich reserves of oil and gas, Tinubu noted that his administration inherited a nation overly reliant on oil while neglecting its gas resources. This situation was further exacerbated by the subsidization of fuel costs.
Upon assuming office, Tinubu immediately removed fuel subsidies, causing the pump price of petrol to surge from approximately N200 per litre in May 2023 to around N700 per litre.
To mitigate the impact of these changes and reduce dependence on imported fuel, his administration launched an initiative focused on Compressed Natural Gas (CNG).
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“Fellow Nigerians, we are blessed with both oil and gas resources, yet we found ourselves dependent solely on oil-based petrol. This neglect of our gas resources has prevented us from fully leveraging our economic potential. Additionally, we have been using our valuable foreign exchange reserves to subsidize fuel,” Tinubu stated during his address.
To address these issues, Tinubu’s administration introduced the Compressed Natural Gas Initiative, aimed at transforming the transportation sector and reducing costs.
“This initiative will save over N2 trillion each month, which is currently used for importing Premium Motor Spirit (PMS) and Automotive Gas Oil (AGO). These savings will be redirected towards essential investments in healthcare and education,” he explained.
A significant component of this initiative involves distributing one million conversion kits to commercial vehicle owners at extremely low or no cost. These owners, who are responsible for transporting people and goods, consume 80% of the imported petrol and diesel.
“We have commenced the distribution of these conversion kits and are establishing conversion centers nationwide in collaboration with the private sector. We anticipate that the CNG initiative will reduce transportation costs by approximately 60% and help curb inflation,” Tinubu announced.
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The PUNCH reports that while licensed individuals continue to import diesel into Nigeria, the Nigerian National Petroleum Company Limited remains the sole importer of petrol under the current administration.
Despite being Africa’s largest oil producer, Nigeria’s insufficient refining capacity necessitates reliance on imported petroleum products.
Through these strategic initiatives, Tinubu’s administration aims to harness the country’s gas resources more effectively, reduce dependency on imported fuels, and foster economic stability and growth.