As the price of Premium Motor Spirit (PMS) also known as petrol hit the sky with 15 percent increase, the highest price that the country has witnessed in the history of oil marketing, a stakeholder in the energy sector, Muhammad Saleh Hassan, has said that the only way out of fuel price hike trend and scarcity of the product is shift to CNG as alternative.
CNG refers to Compressed Natural Gas. It is a gasoline and diesel fuel alternative that primarily consists of methane. The gas is associated with other fossil fuels (coal or oil) and created by methanogenic organisms in landfills. It is extracted from the source and compressed to a high pressure where it can be stored in a vehicle fuel tank.
The NNPCL had, on Tuesday, announced N617 per litre as the new official pump price of fuel. Before then, the official price had been N539 per litte as occasioned by fuel subsidy removal. The new price indicates a 15 percent increase in one fell swoop and triggered more groaning by Nigerians.
Even, there are indications that fuel sells for N620 in some states, particularly Lagos and Kano.
Hassan said that with this disparity and marketers’ penchant to determine price and make profit, stability of the price remains dicey.
He stressed that the CNG was not only the ultimate substitute to the PMS, but also the cheaper alternative to it and called on government to go for it.
The Chairman of Skymark Energy and Power Ltd stated this in a statement made available to newsmen in Abuja on Thursday.
“The instability of fuel price, particularly the new price hike announced by the NNPCL from N539 to N617 per litre is painful. While Nigerians are still painfully feeling the pains of the recent increase, another price hike has been slammed on us with a staggering 15 percent difference. For how long can we continue like this? Hassan asked rhetorically.
“As a stakeholder, I know that the new N617 per litre price is not outrageous. It is even the cheapest globally in oil market. This means that the price can never drop in this country. In order to save the horrible situation, CNG is the way to go now. It is the best alternative. It is cheaper than PMS and doesn’t burn as fast as PMS which is even costlier,” Hassan stressed.
The Skymark Energy and Power Ltd said that, owing to incessant fuel scarcity and price instability, the Group Chief Executive Officer (GCEO) of the Nigeria National Petroleum Corporation Ltd (NNPCL), Malam Melee Kyari, had earlier proposed CNG to replace PMS as a way to proffer solution.
“In view of the current reality and dynamics in the energy sector, especially the seeming unavoidable price hike, the Federal Government under the administration of President Bola Ahmed Tinubu should consider it imperative to implement the CNG proposal and save the citizenry the hell that they are constrained to suffer in the wake of the fuel price hike,” Hassan noted.
He added: “All that government needs to do is bring CNG. Converting it to PMS can not cost more than one or two trillion naira. The cost of CNG can not be more than N100 per litre if we shift to it. Why then must we insist on using PMS which is costlier than CGN? Moreover, PMS burns faster than CNG when used.”
Hassan, however, pointed out that Kyari, NNPCL and management were not to blame for the incessant fuel price hike because “it is market forces (marketers) that influence the price to make profit.
He called on the Presidential Policy Advisory Council to carry Kyari along in all the decisions they take in the energy sector, especially importation, marketing and price of fuel.
“Taking any decision without carrying along a strong stakeholder and energy expert like Kyari would continue to stir controversy and confusion that are now brewing
in the wake of the staggering fuel price hike.
“Whenever the need arises, the Presidential Advisory Council should invite Kyari to the round table for him to continue giving his expertise ideas which should be followed religiously since he is the expert with a midas touch.
“Kyari is the engine room of the energy sector. He is the initiator of the Petroleum Industry Act (PIA) and fuel subsidy removal. He proposed CNG to replace PMS. He designed the energy transition programme that transmogrified the NNPC to a limited company (NNPCL). All these noble ideas were with a view to proffering lasting solutions to the nation’s perennial fuel crisis.
“With all these notable ideas, his expertise, his energy guru pedigree and as a result-oriented genius in the sector, he should be allowed to participate fully in and complete all the projects that he has proposed right from the days of Buhari’s administration.
“The crisis in the energy sector is not a political issue to play politics around it. It is an issue of expertise.
To get things right, the potentials of the expert must be maximised, hence the need to keep liveraging Kyari’s potentials
“Government’s earlier decision to spend N500 billion extracted from the 2022 supplementary budget to provide palliatives for subsidy removal by giving N8,000 to every less privileged household for six months wouldn’t have offered a permanent solution if it had gone ahead to implement the interventionist programme.
“Although President Tinubu has announced decision to review the palliative measure by giving
fertilisers and grains to approximately 50 million farmers and households respectively in all the 36 states and the FCT, this kind of palliative does not offer a permanent solution.
“Instead, the money should be channelled into CNG project. The way to go now is to utilise the N500 billion proposed for palliative on the NNPCL for CNG programme that was proposed by Kyari to the past administration.
“If you spend N500 billion every six months, in 24 months you are spending N3 trillion. For how long can government be spending such money on palliatives?
“But if government invests the money on CNG, it will guarantee a permanent solution to the fuel problem. It would also amount to solution to sociopolitical and economic problems. It would also go a long way in reducing food inflation because transportation of food produce would become easy.
“Giving palliative based on N500 billion can backfire because if the money finishes, government would be constrained to start looking for money again to give as palliative which is not a permanent solution. That is why CNG is the best way to go because it has permanent solution.
“Even if government is to ease the people’s transport pains with N10,000 for a month, it can never be enough, but N10,000 worth of CNG can be enough. That’s why it is imperative for the CNG to be implemented,” Hassan stressed.
The NNPCL is importing, marketers too are importing. But the price at the NNPCL fuel stations is cheaper than the marketers’ stations. Therefore, if CNG is being implemented, government should leave marketers out of the project, invest the subsidy money on the NNPCL and allow it to drive the project.
“If the money is invested in NNPCL, it would add more premium to the company, especially when government is selling out the shares. So, it is better to invest the money on NNPCL to drive the CNG programme so that even if it is sold to private owners, the dividends would still remain in the system.
It’s possible to create CNG pension and covert vehicles to CNG. The NNPCL has a spectrum of programmes for the CNG as designed by Kyari.
“In executing the programme, government should not play into the hands of marketers who are only looking for profit, but should rather encourage the NNPCL to handle it since it is its initiative through Kyari’s idea.
“Kyari and NNPCL are not to blame for fuel price increase. Government is to blame instead because the hands of the NNPCL and Kyari are tied as they don’t determine fuel price. The market forces do. The Advisory Committee should sit down with the NNPCL management to get a complete insight of the market and the dynamics of petroleum products in the country and do the right thing.
“Malam Kyari has the CNG and the PIA template. He has the expertise knowledge of how the industry can work. The Presidential Economic Advisory Council should work with him and optimise his expertise potentials to be able to find a way out of the perennial fuel crisis in the country.”
The Skymark Energy and Power Ltd boss, however, said that the price of PMS could only drop if CNG was brought in as an alternative because, at that point, marketers would be constrained to look for customers to buy their PMS product.