Nigeria is anticipated to produce at least N1 trillion annually from the adoption of autogas conversion, according to the Nigeria Liquefied Petroleum Gas Association (NLPGA), an umbrella organization of members involved in the LPG value chain.
Ladi Falola, second vice president of the NLPGA, said that the unification of the Naira with the new Federal Government’s foreign exchange policy would in the long run help the gas industry with increased foreign direct investments from investors who are willing to explore the opportunities available in the sector. He was speaking at a press conference in Lagos ahead of the association’s 13th annual International Conference and Exhibition.
Falola claimed that the action would also provide them the assurance that they could repatriate their efforts.
Falola urged the Federal Government to develop certain incentives as a matter of policy to support the autogas conversion program.
The plan, according to him, would support the nation’s ongoing efforts to switch to cleaner and more sustainable energy sources while also helping to mitigate the effects of high energy costs made worse by the loss of gasoline subsidies.
“If the government targets one million petrol vehicles, two million tricycles, five million petrol generators and all lories, incentives will range from N200, 000, N100, 000, N50, 000 and a duty levy and Value-Added Tax (VAT) waiver for 36 months’ window for vans and lorries respectively.”
“Then interested investors will now look for the differentials to cover the typical conversion cost, which ranges from N300,000 to N400,000 for Petrol Vehicles, N100,000 to N200,000; N90,000 for petrol generators and N18 million (this is the cost differentials between a gas engine truck and a diesel engine truck).”
They emphasized that for petrol vehicles, CNG, LNG, propane autogas LPG are recommended, while Butane and domestic LPG are suitable but may only be used under specific authorization by the vehicle’s Original equipment manufacturers (OEM), which is not recommended. They also stated that four-stroke engine tricycles can accommodate CNG, LNG, propane, autogas LPG, and butane, while domestic LPG (cooking gas) is not ideal, and that four-stroke engine petrol generators must not use CNG, LNG, and domestic LPG but can accommodate propane, autogas LPG and butane, noted that CNG and LNG are recommended for Vans and lorries.
President, NLPGA, Felix Ekundayo, said the public needs to further explore the usage of liquefied Petroleum Gas (LPG) other than cooking due to the rising cost of fossil fuels, alongside the rapidly increasing traditional form of energy generation through electricity as Service Based Tariffs (SBT) for electricity guided by the Nigerian Electricity Regulatory Commission (NERC) is expected to increase from reports based on floating of the naira and a spike in inflation.
“PwC Nigeria estimates that economic activities stimulated by the domestic utilisation of Nigeria’s recoverable proven gas reserves have the potential to generate a Gross Value Add (GVA) of $18.3 billion yearly to the domestic economy and $10.5 billion through direct economic value addition with LPG contributing $1.3 billion and its excess allied components Propane and Butane contributing a further $2 billion of this, which is in comparison to generating annual value of $7 billion,” he said.
With recommendations for the policy and rollout, technology in LPG, opportunities for the youth, lifestyle impact and economic empowerment for women, identifying financial incentives for the decade of gas, the petroleum industry act, and multiplier effects in the LPG sector, the association’s Executive Secretary, Lanre Bayewu, stated during the announcement that this year’s conference will examine autogas as an alternative to fuel subsidies, which is a pertinent issue in the country.
As part of the safety measures, the group has in the meanwhile cautioned the public against hiring quacks to convert generators and petrol-powered vehicles to autogas.
The group emphasized that, in order to assure safety, it will be educating experts in conversion and maintenance. It also urged Nigerians to hire licensed conversion specialists in order to lessen and prevent the risk of explosions.
