Sylva: Full Deregulation Can Promote Gas as Cheap Substitute to Petrol

Timipre Sylva

Nigeria’s recent drive to fully deregulate her downstream petroleum sector is capable of promoting the use of gas as a cheaper alternative to petrol, the Minister of State for Petroleum Resources, Mr. Timipre Sylva has said.

Sylva said in his remarks at the 26th edition of the Nigerian Economic Summit Pre-Summit event which featured talks on domestic gas utilization.

According to him, the federal government was keen on leveraging Nigeria’s gas resources to address the country’s energy challenges.

He noted that the country has barely made the most of its huge gas deposit which was put at 200.79 trillion cubic feet (tcf) in 2019 by the Department of Petroleum Resources (DPR) and could last for 92 years, adding that it remained one of the top ten global gas flaring nations with up to 321.29 billion cubic feet (bcf) representing around 11 per cent of total produced gas flared annually.

According to him, through the National Gas Expansion Program (NGEP) which was recently launched and the government’s full deregulation of the downstream sector, gas as cheaper alternative to petrol for transportation, power generation and other domestic uses could gain prominence.

He described the NGEP as the government’s current flagship program which sought to promote domestic utilisation of natural gas, adding that it has subcommittees on Autogas, Liquefied Petroleum Gas (LPG), Compressed Natural Gas (CNG), Liquefied Natural Gas (LNG) and Gas Based Industries; all with the potential to alter Nigeria’s energy consumption pattern.

“With the current drive of government to establish a fully deregulated PMS market, it is imperative to ensure that Nigerians have access to alternative fuels which are cheaper and give great value to the consumer. Vehicles can be retrofitted to run on LPG, LNG or CNG which are cheaper than PMS. Generators can also be retrofitted to utilise dual fuels,” Sylva said.

The minister explained that the NGEP was working assiduously to ensure that Nigerians can have access to these alternatives in the coming months.

“You will recall that I had directed that vehicles within my fleet and all the fleet of all heads of agencies under the ministry be retrofitted to utilise Autogas. This is to show the Nigerian people our commitment to this process and prove to them that it works.

“With Autogas, Nigerians will make significant cost savings in comparison to PMS at the current price levels. It is also hoped that lifting the demand on PMS in-country may aid a downward price adjustment considering the normal forces of demand and supply.

“With autogas usage, the following are net benefits for Nigeria: Autogas is a cleaner fuel for a greener Nigeria, it is the eco-friendly option, it is a weapon against climate change, it is part of a more secure Nigerian energy mix, it serves as an economic alternative, it is seen as part of Nigeria’s socio-economic fabric and a wealth of untapped potential,” he stated.

He said that the NGEP has engaged multiple stakeholders across the gas value chain and could launch some pilot Autogas stations across the country soon.

On the progress of the Nigerian Gas Flare Commercialisation Programme (NGFCP), Sylva disclosed that preferred bidders for gas flare fields will be announced following the advancement in the bid round.

“The NGFCP is designed as the strategy to implement the policy objectives of the FGN for the elimination of gas flares from Nigeria’s oil and gas fields in the near term (2-3 years), with potentially enormous multiplier and development outcomes for Nigeria. It is also designed as the contribution of the petroleum sector to Nigeria’s Intended Nationally Determined Contributions (INDC) under the Paris Agreement (COP21).

“It is a unique and historic opportunity to attract major investment in economically viable gas flare capture projects whilst permanently addressing a 60-year environmental problem in Nigeria. The first phase of the bidding round for the flare sites have reached an advance stage with investor proposals and would shortly be evaluated with successful companies awarded a permit to access flare gas,” he explained.