FG approves exemption from import duties for CNG vehicles

FG approves exemption from import duties for CNG vehicles

The Federal Government said on Wednesday it had approved a duty exemption for imported compressed natural gas vehicles, as well as CNG kits, as part of incentives to encourage the conversion of existing vehicles to CNG-compatible vehicles.

The Program Director and Executive Director of the Presidential Initiative on Compressed Natural Gas (Pi-CNG), Michael Oluwagbemi, disclosed this at a stakeholder engagement meeting in Ilorin, Kwara State, on Wednesday.

He said the federal government hopes to achieve the conversion of one million vehicles of the approximately 10 million existing gasoline vehicles by 2027.

“This will save Nigeria between $2.5 and $3.5 billion annually and will allow us to save almost 10 million liters of gasoline than we currently use.

“In the Federal Government circular of December 2023, approved by Mr. President and issued by the Ministry of Finance, through the office of the Special Adviser on Energy, the exemption of import duties for all motor vehicles was approved. to CNG as well as for kits including equipment used to manufacture CNG Vehicles in Nigeria. It is the permanent order of the FG. It is for those who manufacture CNG vehicles in Nigeria as well as those who bring vehicles. In the meantime, yes, there is still a need to comply with the regulations of the SON and other regulatory agencies,” Oluwagbemi told reporters while reacting to the investigation.

Oluwagbemi also explained the advantages of CNG vehicles over petrol vehicles, saying that CNG vehicles run on clear and better energy for a safe environment.

“CNG vehicles are cheaper (40 to 70 percent cheaper than gasoline vehicles), safer (18 percent less than gasoline or diesel vehicles) and more reliable. With CNG vehicles, there is less use of mechanics either to change the oil or, where appropriate, than other vehicles.”

Speaking on the cost of converting petrol vehicles to CNG vehicles, the expert said the conversion cost is currently between N300,000 and N750,000.

However, he said that “the FG is already working on a conversion incentive program that will be announced on May 29. It will start gradually and improve. We hope to convert one million vehicles by 2027 and save Nigeria between $2.5 and $3.5 billion a year and get almost 10 million liters of gasoline from what we are currently using.

“The reality is that when the FG can provide CNG and CNG conversion kits, the commercial vehicles that move around 90 percent of the population, there will be no reason for the FG to renege on its promise to eliminate the subsidy and “Ensure that Nigerians do not pay for importing poverty and exporting jobs which was the order of the day when we used to import oil instead of exporting gas and use our gas for the benefit of all Nigerians.”

He said the conversion incentive program would include access to graduated payments and discounted rates for CNG conversion.

Ekiti State Commissioner for Transport, Kolawole Ajobiewe, said the CNG conversion program would alleviate the suffering of transporters in the country.

“It is a way out of the problems related to the use of oil and also an alternative initiative, since it involves natural gas. It is more economical and the vehicle’s engine will last longer than before and at a lower cost. The federal government means well for all Nigerians, so we need the cooperation and understanding of all Nigerians,” he said.

Also, the Special Adviser to the Ondo State Governor on Transport, Olugbega Omole, described the program as a laudable initiative that everyone should participate in.

He said the Ondo State government plans to have 80 CNG vehicles, adding that the state government had launched five CNG buses for free school transportation due to the high cost of petroleum.

Former Chairman of NURTW in Kwara State, Alhaji Isa Ore, said transporters support the CNG conversion programme. However, he said the challenge was how to convert existing cars/vehicles to CNG compatible vehicles.

He sought assurances from the government that the conversion will be beneficial to members.

Rolling Energy Providers Limited Chief Executive Officer Umar Mubarak, represented by Chief Operating Officer (COO), Uzzy Ajeroh, said petrol vehicles and CNG vehicles will be operated side by side until full conversion is achieved.

He said the federal government would set up conversion points, adding that modalities for conversion would be worked out to ensure a smooth transition.

“CNG is a better option and is beneficial for everyone,” he said, explaining that CNG is different from cooking gas.

The stakeholder engagement meeting was attended by heads and members of transport unions from NARTO, TOAN, RTEAN, NURTW, NATA and Union of Tipper and Quarry, as well as affiliated unions in Ekiti, Kwara, Ondo, Kogi and Osun.