By Mary Sunday
The President of Independent Petroleum Marketers Association of Nigeria (IPMAN) on Tuesday said that extortion by officers of the Department of State Security (DSS), Police and arbitrary levies by government agencies as well as international pricing were responsible for the recent increase in fuel price from N537 to N617.
The National President of the association, Mr Chinedu Okoronkwo said this at a public hearing by the House of Representatives Ad hoc Committee on the Recent Hike in Petrol Pump Price.
According to him, Nigeria is now in the regime of Petroleum Industry Act adding that what controls the market now is reality.
Okoronkwo disclosed that IPMAN members are presently cash trapped and cannot engage in direct importation of fuel as they are presently owed about N250 billion by Nigeria ‘s oil giant, the NNPCL.
He further called on the government to instruct all it’s agencies to put a stop to arbitrary charges which are built into the price of fuel by marketers.
Speaking on the way forward on the present challenges in the oil sector, the President however recommended a switch to Compressed Natural Gas (CNG) to permanently address the rising cost of Premium Motor Spirit (PMS) in the country in order to ease challenges faced due to the removal of subsidy.
Okoronkwo acknowledged that the only way for Nigeria to make meaningful progress was to remove fuel subsidy so that government can save money for other critical aspect of the economy.
He explained that in a deregulated business, the reality and the fundamentals of the business will play out as everyone has seen in the increase of petrol petrol price sequel to the removal of fuel subsidy.
He further noted that the floating of the dollar has also contributed as the commodity is not refined in Nigeria, hence the detracts of International prices will affect it.
The president also explained that Nigeria has mega quantity of gas especially in the Niger/Delta which can be a succor.
“In spite of the excruciating pain of subsidy removal, they’re something that can act as a succor in the country if we must live and be happy.
“Energy everywhere is critical, it is in the security list of every nation and God has given us about the best in gas that can last for over 500 years.
“What we require now is to build the market, the demand will be there, we need this hose to help us build the market.
“Everyone is feeling the pintch, everyone has taken the bullet; palliatives is just for some time, what is the permanent solution is what we have brought to the nation and we tag it good news because with little money you can fill your tank and still do business,” he said.
Okoronkwo said if Nigeria is thinking building a 6000km pipeline to Europe to sell gas because there is an organised market there, we can do a lot more for a market of 200 million Nigerians.
Also, a partner of IPMAN and the Managing Director of Gas Analytics and Sorutiral Index, Mr Brian Amonu said that Nigeria has way more gas than crude oil.
According to him, this is in spite of the fact that most of the gas discoveries in the country were accidental as no one goes out looking for gas but crude oil.
Amonu explained that the reason a lot of gas is flared in the country today despite its environmental hazards is because there is no organised market for the product.
According to him, as a result of the lack of a vibrant market for natural gas in the country, a lot of oil companies flare the gas, simply put, they waste it.
He said that if funding is provided and the technology deployed today, within four months, Nigerians will be relieved from the high cost of petrol.
“This solution lies in the Central Bank of Nigeria (CBN), in it lies a N250 billion gas expansion facility.
“The objective of that facility is to support the utilisation of natural gas; we have written to CBN since last year way ahead of subsidy removal, we have had meetings convened by the former Finance Minister and the CBN, NNPC and other stakeholders and we told them the solution to subsidy removal can be implemented in one day.
“Nigerians, vehicle owners and state government should be given access to the borrow N200,000 to convert their vehicle or tricycle from that N250 billion.
“That will catalyze investments along the value chain because you need to have a large pull of converted vehicle to justify the investment to deliver that gas to every part of the country.
“The solution is here, we have been preaching this since last year, the government does not have to do anything new; there is funding at CBN to support this.
“The only way natural gas can be a substitute is be providing loans for vehicle users; every country that transitioned from petrol subsidy to natural gas India, Egypt, Bangladesh, Iran either gave free kits, subsidies the kits or give access to loan to make it easy for people to convert vehicle and catalise investments,” he said.
Amonu said that international development finance institutions no longer give loans to build refineries anymore because it is considered a dirty field.
He said that development of natural gas on the other hand attracts global investments as the gas flared in Niger Delta is not only affecting the health of the inhabitants but the world climate as a whole.
He said that every technology required to migrate from petrol to natural gas is already in use in the country.
“If we transit just 10 per cent of the 48 million liters of Premium Motor Spirit (PMS) otherwise known as petrol we consumed a day to natural gas, it will save Nigerians two billion naira everyday or N730 billion naira every year.
“Just by transitioning 10 per cent of the petrol we consume today to natural gas and what that means is that, we can deliver natural gas through IPMAN platform in Kebbi, in Borno at N200 per litre equivalent.
“That will affect positively the price of beans going from Kano state to Imo, that will affect positively the price of cattle going from Sokoto state to Lagos state.
“When you convert your car to natural gas, it does not run on natural gas 100 per cent, when you push a button, to switch to natural gas another to switch to petrol.
“The conversation process is very simple, depending on the type of vehicle or tricycle, it takes about four to six hours to convert your vehicle.
“And because natural gas burns cleaner than petrol and diesel, you do not have to change your engine oil as frequently; this is additional savings and natural gas reduce the emission by 15 to 60 per cent.
“The only sustainable solution to the rising price of petrol, is to switch to natural gas which we do not have to spend a dollar on importation,” he said.
Earlier, the Chairman of the Committee, Rep. Benson Babajimi (APC-Lagos state) said that the committee was set up to investigate the hike in petrol price from N537 to N617.
He said that petrol is the lifeline of the Nigerians economy and an increase in the price will affect price of food on which Nigerians spend 80 per cent of their income.
Babajimi said though the government meant well for the nation, there was need to ensure the hike does not have devastating effect on Nigerians.
He urged the stakeholders to be open in their submission to enable the committee deliver on its mandate saying that that the committee will be transparent and objective in its reports.
