…To promote use of CNG as alternative fuel
…Unifies PIB, creates two industry regulators
… To conduct oil bid rounds after PIB passage
…Eyes PIB passage in May
By Michael Eboh
The Minister of State for Petroleum Resources, Chief Timipre Sylva, Thursday, disclosed that the Federal Government is set to discourage the use of Premium Motor Spirit, PMS, also known as petrol, for transportation.
Addressing newsmen in Abuja, Sylva stated that payment of subsidy on petrol was taking a huge toll on the finances of the country and the government was working on encouraging Nigerians to use compressed natural gas, CNG, as fuel for transportation.
Sylva explained that the introduction of CNG as an alternative fuel would crash the cost of transportation and play a crucial role in eliminating the huge burden of subsidy payment.
He said, “If you ask me if we are thinking of reducing the pump price of fuel, I could easily say yes; and I am sure all of you would wonder why I said that. Why I could say yes, is that we are thinking of giving the masses an alternative. Today, we are all hooked on PMS, what we want to do going forward, is to see that we are able to move the masses to CNG. This is what I call the GSM treatment.
“In this country, people used to fight anytime the government wants to privatise NITEL. Nigerians kicked because there was no alternative, but when the masses were given GSM, and they got hooked to it; I for one, I did not know when NITEL was privatized and most Nigerians also did not know when it was privatized. Nobody kicked, because it did not matter to them anymore.
“What we decided is that we should try and give the masses an alternative. If we move the masses to CNG, that is, take transport vehicles in the first instance, for example, out of the PMS loop, and cause them to use CNG, you would see that it would become the point of contact of the poorest of the population, and even further down, take out a lot of people from the loop of PMS.”
CNG to cost N97 per litre equivalent
He disclosed that presently, at between N95 and N97 per litre equivalent, CNG costs less than the subsidized price for PMS, unit for unit, which is N145 per litre.
“That is why I said we want to even reduce the cost of fuel. That way, we know we are giving an alternative and Nigerians would use it and would not notice when the subsidy of PMS is removed. That is the alternative we are working on, and we would start very soon to roll out.
“Already, there is a pilot programme in Benin City, which has worked for a long time. About 4,000 vehicles are already on CNG in Benin. We want to expand that CNG programme across the country and we believe it is going to create a lot of opportunities for Nigerians and also give Nigerians a new lease of live because the commodity would be accessible,” he maintained.
To unify PIB, create two industry regulators
In an obvious policy shift and a deviation from what obtained during the administration of Dr. Ibe Kachikwu as Minister of State for Petroleum Resources, Sylva disclosed that the Federal Government has discarded the idea of unbundling the Petroleum Industry Bill, PIB, into three different documents and had also jettisoned the idea of a single regulator for both the upstream and downstream petroleum industry.
Sylva expressed optimism that the unified PIB would be passed by the National Assembly by May this year, while he called for support for all stakeholders to bring this to reality.
He said, “The PIB is one bill. I only looked at the two parts of the bill. When we approach the bill, we are not taking it as a bill in parts; we are going to take it as a bulk bill. It would be passed as the PIB. In the PIB, you have the Petroleum Industry Governance, Administration and Host Community Bill and the Petroleum Industry Fiscal Bill. These are two parts of the same bill, governing the same sector. We are going to take it as one.”
He added that the Federal Government was considering two regulators, one for the upstream and another regulator for the midstream and downstream sector of the petroleum industry.
He said, “Special focus will be placed on the midstream and downstream sectors. Consequently, we are considering two regulators, one for the upstream (the Commission) and another for the midstream & downstream (the Authority).
According to the minister, the team working on the PIB is at the final stage of the harmonisation of all the existing versions from 2000 to date, comprising both the 2009, 2012 and 2018 versions, with consideration to the concerns raised by the industry players to create an enabling environment for investors as well as appropriate government take in all the oil and gas value chain.
He explained that counting on the current harmony between the Executive and Legislative arms of the government, the present administration was optimistic that both the Petroleum Industry Governance, Administration & Host Communities Bill on one hand and Petroleum Industry Fiscal Bill on the other would be passed within the first anniversary of this administration.
PIB delay holding back oil bid rounds
Sylva further stated that the government plans to conduct bid rounds for new acreages in the petroleum industry, noting, however, that non-passage of the PIB was delaying the conduct of the rounds.
According to him, the decision of the government to delay the award of new acreages until after the passage of the PIB was because the bill would ensure create a clearer fiscal environment and also eliminate the stagnation in the industry.
Experts to manage refineries after revamp
He also stated that the government was committed to the revamp of the refineries, noting that when the refineries become fully functional, the Federal Government intends to undertake an operations and management contract, whereby an expert would be brought in to manage the refineries effectively and cut down on all unnecessary costs and bureaucracy.