…CNG Initiative To Save Nigeria N2tn Monthly Import Bill On Petrol, Diesel
The Executive Order signed by President Bola Tinubu to unlock the potentials of Nigeria’s oil and gas sector is beginning to yield results as two Foreign Direct Investments worth over $500m have been signed.
The President revealed the figure on Sunday in his ‘State of Nation’ address after hunger led to a nationwide protest with a major theme: #Endbadgovernance.
The Presidential Executive Order on Oil and Gas Reforms is aimed largely at improving the investment climate and positioning Nigeria as the preferred investment destination for the Oil and Gas sector in Africa.
The three Executive Orders, which became effective 28th February 2024, are the Oil and Gas Companies (Tax Incentives, Exemption, Remission, etc.) Order, 2024; Presidential Directive on Local Content Compliance Requirements, 2024; and Presidential Directive on Reduction of Petroleum Sector Contracting Costs and Timelines, 2024.
Nigeria is endowed with large oil and gas resources and Executive Order aligns with the transformational leadership of the Group Chief Executive Officer of the Nigerian National Petroleum Company Ltd, Mele Kyari who had conceived the idea of monetising Nigeria’s huge gas resources through various gas projects.
The target of the Executive Order is to unlock up to $10bn fresh investments in the nation’s oil and gas sector.
This is expected to come through fiscal incentives for non-associated gas, midstream and deepwater oil and gas.
The Executive Order streamlines contracting processes, procedures, and timelines from 36 months to six months and also ensured that local content requirements are implemented without impeding investments or the cost competitiveness of oil and gas projects
Speaking on Sunday on the impact of the initiative, Tinubu said the once-declining oil and gas industry is experiencing a resurgence on the back of the reforms he announced to address the gaps in the Petroleum Industry Act.
Specifically, he sald the nation has seen an increase in oil production to 1.61million barrels per day, and the gas assets are receiving the attention they deserve.
He said, “Our once-declining oil and gas industry is experiencing a resurgence on the back of the reforms I announced in May 2024 to address the gaps in the Petroleum Industry Act. Last month, we increased our oil production to 1.61million barrels per day, and our gas assets are receiving the attention they deserve.
“Investors are coming back, and we have already seen two Foreign Direct Investments signed of over half a billion dollars since then.”
To address the challenge created by the removal of petrol subsidy, the president said his administration has launched the Compressed Natural Gas Initiative (CNG) to power transportation economy and bring costs down.
This, he added, will save Nigeria over N2tn a month spent to import PMS and AGO and free up resources for more investment in healthcare and education.
He said, ” To this end, we will be distributing a million kits of extremely low or no cost to commercial vehicles that transport people and goods and who currently consume 80 per cent of the imported PMS and AGO.
“We have started the distribution of conversion kits and setting up of conversion centres across the country in conjunction with the private sector. We believe that this CNG initiative will reduce transportation costs by approximately 60 per cent and help to curb inflation.”