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CLEAN ENERGY: FG To Effect Import Duty Waiver For CNG Vehicles

The Federal Government said, on Wednesday, that it had approved a duty waiver for imported vehicles with Compressed Natural Gas as well as CNG kits as part of incentives to encourage the conversion of existing vehicles to CNG-complaint vehicles.

The Programme Director/Chief Executive of the Presidential Initiative on Compressed Natural Gas (Pi-CNG), Michael Oluwagbemi, disclosed this at a stakeholders’ engagement meeting in Ilorin, Kwara state on Wednesday.

He said the Federal Government was hoping to achieve the conversion of one million vehicles out of about 10 million existing petrol vehicles by 2027.

“This will save Nigeria between about $2.5bn and $3.5bn yearly and getting us off almost 10 million litres of petrol from what we’re currently using.

“Federal Government in December 2023 circular, approved by Mr. President and issued by the finance ministry, through the office of the Special Adviser, Energy, had approved import duty waiver for all CNG auto vehicles as well as kits, including equipment used to manufacture CNG vehicles in Nigeria. It’s the standing order of the FG. It’s for those who are manufacturing CNG vehicles in Nigeria as well as those bringing in vehicles. Meanwhile, yes, there’s still need to comply with regulations by the SON, and other regulatory agencies”, Oluwagbemi told Journalists while reacting to inquiry.

Oluwagbemi also explained advantages of the CNG vehicles over petrol vehicles, saying that CNG vehicles run on clear and better energy for a safe environment.

“CNG vehicles run cheaper (40 to 70 per cent cheaper to petrol vehicles), safer (18 per cent saver than petrol/diesel vehicles) and more reliable. With CNG vehicles you go less to mechanics for either oil change or, as the case may be, than other vehicles”.

Speaking on the cost of converting petrol vehicles to CNG vehicles, the expert said that the cost of conversion is currently between N300,000 and N750,000.

However, he said that, “the FG is already working on conversion incentives programme to be announced on May 29. It will start gradually and get better. We are looking at conversion of one million vehicles by 2027 and saving Nigeria about $2.5 billion and $3.5 billion a year and getting us of almost 10 million litres of petrol from what we’re currently using.

“The reality is that by the time the FG is able to provide CNG kits and CNG conversion, the commercial vehicles that move about 90 per cent of the population, there will be no reason for the FG to renege on the promise to remove subsidy and to ensure that Nigerians do not pay for importation of poverty and export of jobs that was the order of the day when we used to import petrol rather than exporting gas and using our gas for benefits of all Nigerians”.

He said that conversion incentive programme would include access to gradual payment and discounted rates for the CNG conversion.

The Ekiti state commissioner for Transportation, Kolawole Ajobiewe, said that the CNG conversion programme would alleviate suffering of the nation’s transporters.

“It’s a way out of problems associated with the use of petrol as well as an alternative initiative, since it’s natural gas. It’s more economical and vehicle engine will last longer than before and at low cost. Federal government means well for all Nigerians, so, we need the cooperation and understanding of all Nigerians”, he said.

Also, Special Adviser to Ondo state governor on Transport, Olugbega Omole, described the programme as a laudable initiative that all should key into.

He said that Ondo state government planned to have 80 CNG vehicles, adding that the state government had launched five CNG buses for free school transportation due to high cost of petroleum.

The former chairman, NURTW in Kwara state, Alhaji Isa Ore, said that the transporters are in support of CNG conversion programme. He, however, said that the challenge was how to convert the existing cars/vehicles to CNG compliant vehicles.

He called for reassurance from government that the conversion will be beneficial to members.

The CEO, Rolling Energy Providers Limited, Umar Mubarak, represented by the chief operation officer (COO), Uzzy Ajeroh, said that the petrol vehicles and CNG vehicles would be operated side by side till the whole conversion is achieved.

He said that the federal government would set up conversion points, adding that modalities would be worked out for the conversion to ensure a smooth transition.

“CNG is a better option and is beneficial to everyone”, he said, explaining that the CNG is different from cooking gas.

The stakeholders engagement meeting had in attendance chieftains and members of transport unions from NARTO, TOAN, RTEAN, NURTW, NATA and Union of Tipper and Quarry, as well as affiliate unions in Ekiti, Kwara, Ondo, Kogi, and Osun states.

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