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FG To Assist Fuel Marketers With CNG Pump Installations

Published

7 months ago

May 18, 2024.

FG To Assist Fuel Marketers With CNG Pump Installations.
IPMAN raised concerns about the high costs of installation and high-interest rates from banks.
IPMAN suggested creating an ‘energy bank’ to provide more accessible loans for marketers.

EKO HOT BLOG reports that the Federal Government is considering assisting independent fuel marketers in financing the installation of Compressed Natural Gas (CNG) sales pumps at filling stations nationwide.

This initiative comes in response to concerns raised by the Independent Petroleum Marketers Association of Nigeria (IPMAN) regarding the high costs associated with installing these pumps, as mandated by a presidential directive to promote the CNG initiative.

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In an interview with Punch Newspaper, IPMAN’s Public Relations Officer, Chinedu Ukadike, highlighted the challenges faced by marketers due to prohibitive installation costs and high-interest rates from banks. He suggested establishing an ‘energy bank’ to provide more accessible loans for marketers.

He said, “Compressed Natural Gas is a welcome development. In the last meeting held with the Nigerian Midstream and Downstream Petroleum Regulatory Authority, we were advised to install pumps and tanks as an add-on to our stations. We raised concerns about the licensing of the add-on and the conversion centre. The government had agreed that some of our filling stations would be used as conversion points for CNG vehicles. Unfortunately, we are still not aware of the next plan to commence this process to integrate independent marketers into the CNG programme.

“On the financing part, some banks had approached us and have mapped out some money for this kind of venture, but I also believe that there should be a microfinance bank set up by the government to help marketers engage in this venture. We have also advocated for an energy or petroleum bank, just like we have the Bank of Industry and Bank of Agriculture, where marketers can seamlessly obtain loans without any extra charges or high interest rates.

Marketers With CNG Pump Installations

“The interest rates in commercial banks are burning our business. We cannot source fresh capital to fund this venture from them, and that is why we need the government’s assistance. We are already spending a lot on distributing petroleum products.”

When asked if the marketers needed government assistance to install CNG pumps, he said, “Yes, we definitely would appreciate it if the government could assist us.

In response to President Bola Tinubu’s commitment to end the fuel subsidy era and promote CNG as an alternative fuel, the Federal Government announced plans to launch the CNG initiative before the President’s first anniversary in office.