…as FG merges exchange rate
The National Economic Council (NEC) held its inaugural meeting under the Administration of President Bola Tinubu, Thursday, in Abuja, with the aim of coming up with ways and means to soften the impact of the fuel subsidy removal on Nigerians, especially the more vulnerable.
The meeting was chaired by Vice President Kashim Shettima.
The task before NEC is made even more challenging by the Federal Government’s decision, Wednesday, to unify the country’s exchange rate, a move which experts say will further aggravate the increase in the prices of food and other basic needs in the short run.
It is the concensus of experts, however, that both the removal of the fuel subsidy and the exchange rate unification, are vital to restoring the health of the Nigerian economy in the long run and will yield good fruit if properly managed.
Bauchi State Governor, Bala Mohammed told State House correspondents after the NEC meeting, that the Council discussed the option of obtaining funds from the World Bank and London partners to implement a Compressed Natural Gas (CNG) programme for vehicles in Nigeria, as part of measures to cushion the impact of fuel subsidy removal.
Governor Mohammed further disclosed that the Council considered other recommendations, including one proposed by the organised labour for N702.9 billion consequential adjustments on allowances, as well as no less than N25 billion naira per month, to cushion the effects of the subsidy removal.
He added that recommendations made by the committee on palliatives, headed by erstwhile Vice President Yemi Osinbajo, would also be considered.
Of the options, it would appear that the lead consideration for now, is that of providing cheaper fuels to facilitate human transportation and the haulage of goods, deploying Compressed Natural Gas (CNG) and Liquified Natural Gas (LNG).
Accentuating this on Wednesday, Mele Kyari the group chief executive officer of the Nigerian National Petroleum Company (NNPC) Limited, after a meeting with President Tinubu, told reporters that the alternative fuels, (CNG and LNG) intervention project plans would be rolled out soon.
Kyari added that the structural plan, which he described as a work in progress, was part of the President’s petroleum products subsidy removal palliative measures for citizens.
He further said there was already an ongoing rehabilitation exercise in the nation’s refineries, to be unveiled soon.
CNG and LNG are significantly cheaper than petrol and are being increasingly used across the world to power mass transit buses, trucks and trains, as cost effective and more environment friendly fuels.
On average, fuel costs for LNG trucks are about 48 percent lower than for diesel trucks.
There is a budding use of CNG and LNG in Nigeria, especially for heavy duty/mass transit vehicles and industries.
The challenge is that the vast majority of vehicles in Nigeria are petrol or diesel powered and would have to go through technical adaptations, which come at significant cost, to be able to use the said cheaper (CNG and LNG) fuels.
It was not immediately clear if the Federal Governments plans to extend its intervention to bearing all or some of the cost of conversion of private or public commercial vehicles from petrol and diesel to CNG and LNG, or will stop at encouragement and the provision of the cheaper fuels.
Transit buses are particularly well-suited for alternative fuels, it is said, and nearly 60 percent run on these lower-emissions, cost-saving options in the United States of America (USA). Since transit buses can carry more passengers, they have the potential to achieve a higher passenger-mile per gallon.
