‘Presidential CNG Initiative ‘ll Reduce Energy Cost, Boost Economy’

Sunday Okobi

The Chief Executive Officer of Mezovest, Tosin Thompson, has said the systemic issues stalling the implementation of the Presidential CNG Initiative aimed at powering vehicles with CNG to reduce energy costs, should be addressed on time.

Thompson agreed with the President Bola Tinubu’s Special Adviser on Energy, Mrs. Olu Verheijen, on the need for fiscal incentives to deepen supply of CNG and liquid petroleum products, arguing that the government should offer tax incentives to gas producers and remove taxes on gas produced for local demand.

He said the time taken to procure licences and secure approvals should be reduced by eliminating bottlenecks.

According to Thompson, “… I think that addressing the issues quickly will be a boost for the economy. In terms of priority, I believe it is important to give incentives that encourage production to encourage independent participants … achieve a surplus, and see prices come down while adoption scales.”

He stressed that encouraging production should not be viewed as call for subsidies, rather tax incentives that are efficient and less prone to corruption.

The Mezovest boss said: “The government should suspend taxes (or significantly reduce them) on locally produced gas, priced in naira and push through local supply chains. However, this must not be confused with subsidies that would only open the door for huge corrupt practices.”

On the issue of the relationship between electricity supply and gas production, Thompson noted that producers can’t make their production costs due to the cap on the price of gas sold. He recommended that the government intervene with other fiscal incentives on gas sold to the grid so that producers can make a margin even as those prices remain capped.

Thompson said: “I cannot stress enough the importance of accelerating the implementation of the CNG initiative, especially because it could turn around our economic situation for good. If we power enough vehicles with CNG instead of petrol or diesel, we can effectively tackle food inflation, reduce household expenditure, and drive consumption.

Related Articles