Justice Derefaka, the Technical Adviser, Gas Business & Policy Implementation, to Minister of State, Petroleum Resources, in this interview with MOHAMMED SHOSANYA, gives highlights on how Nigeria’s Autogas policy and other initiatives designed to make the deregulation of the country’s downstream sector can be meaningful. Excerpts:
The Federal Government is currently advocating the use of alternative auto fuel following the recent deregulation of the downstream sector of the petroleum industry. Could you tell us the new government policy on alternative motor fuel?
We have the Autogas and Natural Gas Vehicles, NGVs and there are two strands to using gas for vehicle and other prime movers.
The Autogas vehicles are powered by liquefied petroleum gas (LPG) and Natural Gas Vehicles (NGVs) – an alternative fuel vehicle that uses compressed natural gas (CNG) or liquefied natural gas (LNG)].
So, I will like to call them Autogas (i.e. AutoLPG, AutoCNG and AutoLNG) as an alternative fuel in Nigeria.
U.S. Offshore Oil Workers Flee As Storm Zeta Heads Toward Gulf Of Mexico Rigs
Autogas used as an engine fuel is the most commonly used and accepted alternative fuel in the world today.
Global consumption of liquefied petroleum gas as engine fuel, primarily Autogas, has been rising rapidly in recent years, reaching 26.7 million tonnes in 2016 an increase of 5.5 million tonnes (Mt), or 25 per cent, over the 2009 level.
Nigeria needs to do catch up with the rest of the world and that is what the federal government is doing with the National Gas Expansion Programme, NGEP, Autogas scheme.
The Federal Government’s decision to deregulate the downstream petroleum industry was announced in March 19, 2020 and complete deregulation of the downstream sector is an enabler for private sector investment.
Government lost billions of Naira every day to subsidy payment which could have been used in improving the wellbeing of ordinary Nigerians and rebuilding the economy to generate more employment.
So, we expect to save as much as one trillion naira ($2.6 billion) a year after abolition of subsidies.
Fuel subsidies have over the years undermined private and public investment in the downstream sector. The downstream liberalisation will also promote significant investments to raise the standards along the supply chain, from improving the refining capacity, pipelines, trucks, depots and filling stations to supporting the ancillary and derivative industries that will emerge from an improved downstream sector.
The Federal government will continue to play its traditional role of regulation; to ensure that this strategic commodity is not priced arbitrarily by private sector suppliers.
Deregulation will provide employment directly and indirectly to millions of Nigerians across the value chain. This will enable Nigeria to optimize the inherent benefits of African Continental Free Trade Agreement, AfCFTA to which Nigeria is a signatory.
Federal government has made available a finance scheme of 250 billion Naira for gas penetration under the National Gas Expansion Programme (NGEP).
So, in terms of how Autogas in filling station across the country means for businesses in the gas sector since the government is gradually shifting attention to gas business and implications to the overall economy.
You will recall that as part of the Federal Government of Nigeria’s, strategy to reposition the oil and gas industry, the Ministry of Petroleum Resources, has commenced the implementation of carefully conceived initiatives to foster efficiency and attract investments along the gas value chain as embedded in Federal Government’s policy aspirations for the Gas sector and encapsulated in the National Gas Policy (‘The Gas Policy 2017”) and indeed aligning with the Ministry’s 2019-2023 nine priority project deliverables vis-à-vis clusters for gas resource, rapid growth of the LPG/CNG/ LNG market; development of supporting infrastructure, investment, and domestic growth.
Tell us government’s strategies to actualise this objective?
To hasten the switch to Autogas, within fourth quarter of 2020, 9000 stations are up for co-location of Autogas nationwide.
From the government side, 46 NNPC owned stations will be co-located by Q4 2020.
The Federal Government is leading by example and Chief Timipre Sylva, Minister of State for Petroleum Resources has this to say “I have surrendered my vehicles to the NGEP to convert all to dual fuel with use of either AutoLPG or AutoCNG.”
“I now have the moral backing to direct that all CEOs and their able lieutenants do same by converting all their official vehicles to run on Autogas as a demonstration to the Nigerian people that indeed government meant it when we declare this year “The Year of Gas”.
It is cheap, available, affordable and accessible. Autogas as engine fuel is a green, clean burning alternative. It is less expensive than gasoline or diesel in many countries. It is available everywhere. It is intrinsically safer than many other fuels. It is reliable. It is an alternative energy source that is ready now
What is the cost of putting up Compressed Natural Gas filling station
How many of such outlets do we have in Nigeria currently and what are the challenges deploying CNG infrastructure in the country?
Agreed there are barriers to Autogas Scheme Deployment and as a government we have explored viable solutions.
No doubt refueling infrastructure is sparse and there is paucity of Natural Gas fueling stations in the country.
As a way to address that, we have about 1 million conversion kits for trucks and smaller vehicles to be be deployed nationwide in Q4, 2020.
And we have 50 conversion centers currently upgrading for mass conversion and trainings.
Auto assemblers already producing fit-for-purpose dual fuel vehicles are in the country.
It will interest you to know that over 30,000 vehicles already running on dual fuels in Nigeria. And there has never been any explosion. And the scheme will generate 2 million jobs per annum.
By 2021, our projection is that 600 NNPC leased and affiliate fuel stations will co-locate by Q2 2021. About 1 million conversion kits for trucks and smaller vehicles will be deployed and 1 million vehicles expected to run on Autogas. To reiterate, don’t forget that Autogas to lower transportation cost nationwide low operating costs & longer life of prime movers.
What is the cost implication of converting vehicles to CNG?
Cost implication differs. The cost ranges from between N190,000 to N250,000 and that depends on the vehicle. This cost is for a 4-cylinder. And this could go a little higher for a 6-cylinder. The good thing is that it makes car owner save running cost by up to 40 per cent to 45 per cent than that of Petrol.
How do think Nigerians will break apathy of the public towards converting to CNG?
The Minister of state for petroleum resources has demonstrated leadership by handing all his cars and generators to run on gas. And so, we are working towards ensuring that all tiers of Government (Federal, State and Local) can promote Autogas uptake by educating consumers; and leading by example by converting their fleets.
Continues Consumer Awareness is key as Consumers lack of awareness of the benefits (Social, Economic, Health and Environment) of the use of gas is to a great extent limited.
So, we believe the general public need to know certain fundamentals.
For instance, Autogas has been used as a transportation fuel for more than 75 years and is the most widely used and most accessible alternative fuel.
In the developed world, Taxicab companies, government agencies, and school districts often use Autogas instead of gasoline to fuel their fleets mostly in fleets.
For fleet vehicles, the cost of using Autogas is 5 to 30 per cent less than for gasoline.
There are some interesting characteristics about Autogas that make it an ideal engine fuel.
Autogas is cleaner burning than gasoline. It leaves no lead, varnish, or carbon deposits that cause the premature wearing of pistons, rings, valves, and spark plugs. The engine stays clean, free of carbon and sludge. This means less maintenance and an extended engine life. Some fleets report 2-3 years longer service life and extended maintenance intervals.
There are millions of cars running on Autogas worldwide. The chances of one being involved in a road accident are no longer so small, that it can be disregarded.
Unsafe practices in the past have led to a certain preconception about Autogas inducing a higher level of risk.
So, we ask ourselves the question: are Autogas cars safe? Are they bombs on wheels? How dangerous, really, is such an Autogas tank? How does the fuel system behave when your car is rear-ended? Will the tank take the stresses?
I’d like you to know that like with all cars, safety is a major concern. A crash with ensuing fire is the worst of nightmares, unfortunately not that uncommon. Are Autogas cars safe enough? To answer your questions, you need to know that the Autogas tank and fuel pipes are fitted with numerous safety devices.
The gas flow will automatically stop if the pipes are damaged or the engine is not running. If the vehicle catches fire, the gas tank pressure is controlled via safely venting excess pressure which will prevent the tank from rupturing and causing further damage. Tanks are made of thick steel.
From a regulatory viewpoint, Autogas tanks are designed according to requirements laid down in specific regulations in which equipment, material properties, fabrication processes of the tank shell itself and testing procedures are defined.
The Department of Petroleum Resources (DPR) and Standards Organisation of Nigeria (SON) have representatives in the NGEP and they head the Safety, health and environment subcommittee of the NGEP looking at quality control and assurances (QA/QC) issues and other regulatory plus standard best practice issues. And so, for Government, guaranteeing a high level of safety during normal operation and also in the case of accidents.
The choice of the correct tank and its equipment according to the regulation are very important element in maintaining the high level of safety associated with this fuel.
Let me also add here that one area Nigerians always want some comfort with the use of gas is safety. Using Autogas as fuel has an excellent safety record throughout the world, both in terms of its storage, transportation and use.
Extensive safety tests have been undertaken with respect to its use and the conclusions reached are that it is substantially safer than petrol due to its more robust fuel tank, being more resistant to impact damage.
The electronic solenoid valves trip in case of an impact not allowing fuel to go beyond the circuit to the engine. All tanks are fitted with relief valves that provide an escape for the gas should the tank come in contact with extreme heat.
What strategies should be needed to help private sector break even in that space?
That is simple, they need to brace up and join forces with Government (most of them are already aligned with co-location of gas) and do a cost benefit analysis and see where the market trend will tilt towards when Nigerians begin to see that gas is cheaper and readily available.
SOURCE: oglinks.news