In a current endeavor, oil marketers are modifying their trucks to facilitate the supply of gas to filling stations. This initiative aims to provide Compressed Natural Gas to vehicles powered by gas. Recent reports indicate that approximately 800 tankers, previously employed for transporting petrol to retail outlets, are now undergoing conversion by marketers for the purpose of transporting gas.
According to the marketers, they are now strategically installing Compressed Natural Gas (CNG) dispensing pumps in selected filling stations that traditionally provided Premium Motor Spirit (PMS), commonly known as petrol. This transition gained momentum after the cessation of PMS subsidy by the Federal Government, following President Bola Tinubu’s announcement on May 29, 2023, that the subsidy had been abolished.
The Federal Government has been actively promoting the use of CNG among motorists as an alternative to the prevalent consumption of petrol. Operators emphasize that gas is not only more cost-effective than subsidized petrol but also cleaner and abundantly available in Nigeria.
Chinedu Okonkwo, the National President of the Independent Petroleum Marketers Association of Nigeria, revealed that some of their members have already begun the process of dispensing gas at their stations and incorporating gas facilities on their premises. He further mentioned that one prominent independent marketer has provided over 500 trailers for conversion to transport gas to filling stations.
However, Okonkwo requested not to disclose the names of the station owners, as they prefer to keep a low profile at the moment to protect their businesses from undue attention.
Elaborating further, he stated, “There are also around 300 new tankers that have expressed interest in acquiring CNG trucks. These trucks will be dedicated to serving filling stations that dispense gas to vehicles.
“Our approach involves collocating the gas dispensing plants in a plug-and-play model alongside existing filling stations. This is a significant advantage for IPMAN (Independent Petroleum Marketers Association of Nigeria) because our members have a widespread presence in every Local Government and ward across Nigeria.
“We currently dominate over 80 percent of the downstream oil sector, so this project works in our favor. Building new gas or CNG stations can be a costly endeavor, but the collocation model helps minimize the expenses associated with constructing new stations.”
The drive for the transition to gas usage in vehicles received additional support on Wednesday when the Depot and Petroleum Products Marketers Association of Nigeria met with President Bola Tinubu at the State House. During the meeting, they pledged to provide 100 units of CNG/diesel-powered, 50-seater buses to enhance mobility for the most vulnerable citizens.
During the meeting, Winifred Akpani, the Managing Director of North-West Petroleum & Gas Company Limited, representing the group, disclosed that the newly manufactured buses would be priced at N100 million each and would operate using gas as fuel.
On a separate note, the IPMAN president informed our correspondent that marketers were required to make additional payments for petrol that had not been supplied to them before the removal of subsidy on the commodity. He mentioned that the Nigerian National Petroleum Company Limited, the sole importer of petrol, had instructed oil marketers to fulfill this payment, which amounted to an extra cost ranging from N13 million to N14 million.
The IPMAN president highlighted another concern regarding members who had made payments for petroleum products several months ago but had not yet received their supplies. Furthermore, when the Nigerian National Petroleum Corporation (NNPC) adjusted the price of Premium Motor Spirit (PMS) recently, it demanded an additional payment of N14 million or N13 million from these marketers, creating a problem for them.
The marketers argue that the NNPC should honor the initial payment and provide the products that were ordered before the price increase. They were on the verge of loading their trucks before the price adjustment took effect.
In response to these concerns, the Group Chief Executive Officer of the NNPC, Mele Kyari, addressed the issue during a recent television interview. He explained that immediate price adjustments are common when there is a change in prices, not only for petrol but for other commodities as well. He used the example of buying tomatoes, where a businessman would sell the existing stock at the new price. Kyari emphasized that this situation is a normal aspect of market dynamics and applies to all commodities, including petrol.
He further stated that if prices had declined instead of increased, those holding stock would have been obligated to sell at lower prices to align with market conditions. Kyari regarded the issue as a stock management matter and asserted that it is a typical occurrence for which no remedy exists.
