WHY THE FG CNG PROGRAM CAN'T SUSTAIN ANOTHER SUBSIDY REGIME. (A REJOINDER)~ By Comrade Haruna Braimoh.
This article or write up is to spur up intelligent engagement of the recent increase in the price of the CNG alternative Petrol for those with CNG converted cars and trucks.
Again the well crafted Article of the former SA to the Edo State government Hon Felix Isere actually Prompted alot in the regard.
The Nigerian Federal Government's Compressed Natural Gas (CNG) initiative cannot sustain another subsidy regime because the current program is not a subsidy but a palliative intervention aimed at providing affordability. The government hopes to save on forex, but faces challenges including inadequate infrastructure, like few CNG refuelling stations and conversion centres, and the high initial cost of vehicle conversions for private users. Therefore, the initiative focuses on a gradual transition and infrastructure development, rather than a perpetual financial subsidy.
Why the CNG initiative is not a subsidy:
The primary goal of the CNG initiative is to provide a "palliative intervention" to cushion the effects of fuel subsidy removal and the resulting rise in the cost of living, not to provide a long-term financial subsidy.
FOCUS ON TRANSITION:
The program is designed to facilitate a gradual transition to a more sustainable and affordable economy by promoting the use of abundant natural gas instead of imported petrol, which was heavily subsidized.
LONG TERM ECONOMIC SAVINGS:
The FG intends to achieve significant savings by reducing reliance on imported fuel, which strains foreign reserves. This is a long-term development strategy, not a short-term subsidy.
Why the initiative cannot sustain a subsidy regime:
Inadequate Infrastructure:
There is a severe lack of CNG refuelling stations and conversion centres across the country, particularly outside major urban areas. Without this infrastructure, widespread adoption is difficult.
High Conversion Costs:
The initial cost of converting vehicles from petrol to CNG is substantial for private car owners, creating a barrier to entry despite potential long-term fuel savings.
Focus on Infrastructure Development:
The government's strategy involves building more conversion and refuelling centres, not creating new financial subsidies.
ENVIROMENTAL GOALS
The initiative also aims to reduce greenhouse gas emissions, aligning with national and international climate commitments.
In summary, the FG's CNG initiative is a strategic move to transition Nigeria to a gas-powered economy, not a continuation of the previous fuel subsidy system. Its success depends on developing the necessary infrastructure and addressing conversion costs, rather than relying on direct financial support.
I would again agree with the aspect of advising the Edo state government led by His Excellency HE Sen Monday Okpebholo to provide necessary leadership in driving deliberate Policy to create enabling environment that would make sizeable investment in the regard for the state and making it a hub as far far such initiative is concerned.