Rising petrol price: Seven banks to support IPMAN on compressed gas alternative

THE Independent Petroleum Marketers Association of Nigeria (IPMAN) has confirmed business discussions with seven commercial banks as it seeks alternative solutions to the high cost of petrol.

The discussions, according to the IPMAN chairman, Chinedu Okoronkwo, revolved around providing funding for a compressed natural gas (CNG) facility as an alternative solution to petrol.

IPMAN would prefer to keep the identities of the financial institutions under wraps until it reaches a concrete agreement with them.

The Federal government had on Tuesday, July 18, again increased the price of petrol from about N448-N560 per litre to over N600 per litre. The product’s price goes as high as over N700 per litre in some states.

Okoronkwo said on Wednesday, July 19, that the federal and state governments must create an enabling environment for the business of CNG to thrive as a viable alternative to petrol.

“The government needs to see how to bring in marketers and other oil & gas players into the CNG business for find an alternative to the rising fuel cost. There is no better alternative than gas, and Nigeria is abundantly blessed with it.

“We expect our banking partners to make a down payment of 15 per cent to enable us get down to business. CNG is much more cheaper and can compete favourably with PMS of the enabling environment is created by the government,” he said.

He posited that with Nigeria gifted with abundant 200 trillion cubic feet of gas, there is a plethora of opportunities to maximise gas production for vehicles as a good alternative to petrol.

“Instead of international oil companies flaring the gas, the government can come in and create a market to attract investors into the CNG market. Our thinking is that the moment the market is developed, the man putting his investment in gas would be assured of his returns,” he said.

The IPMAN president further disclosed that the association had started data capturing to know the target base of its market and to reach out to vehicle owners.

President of the Petroleum Retail Owners Association of Nigeria (PETROAN), Billy-Gilly Harry, told The ICIR that the association had similar plans to provide alternatives to Nigerian motorists to cushion the harsh effects of the high petrol price.

“We are working hard to get money and invest in the modular refinery business. We have got an investor that is willing to invest $1.6 billion in modular refineries that have processing plants and CNG plants.

“We are working on that, and we hope that the banks here, whether the Central Bank or merchant banks, would give us the back-up support,” Harry said.

Already, Nigeria has some CNG retail outlets that include Green Gas Limited (NIPCO CNG), and  Power Gas Ogbele CNG compression station, both located in Ibafo (Ogun State), and Abua (Rivers State), respectively.

In Abuja, some Nigerian National Petroleum Company Limited (NNPCL) retail outlets also sell the product to vehicles.



    Most oil exploration companies operating in Nigeria are known to be flaring gas to the detriment of the environment rather than converting it to efficient use.

    Despite being a signatory to Clean Energy and  Paris Climate Accord, the World Bank indicted Nigeria in its Global Flaring Tracker as one of the countries that contributed highest gas flaring in 2022.

    Nigeria has approximately 200 trillion cubic feet of gas, and despite being the largest producer of gas in Africa, it is developing only 25 per cent of its reserves.

    In May, the African Development Bank announced its support for the Trans-Saharan Gas Pipeline (TSGP) project, which will connect Nigeria’s gas fields (from Wari on the Niger River) to the Algerian border, to connect the Algerian network and sell Nigeria’s gas, particularly in the European markets.

    Harrison Edeh is a journalist with the International Centre for Investigative Reporting, always determined to drive advocacy for good governance through holding public officials and businesses accountable.

    Join the ICIR WhatsApp channel for in-depth reports on the economy, politics and governance, and investigative reports.

    Support the ICIR

    We invite you to support us to continue the work we do.

    Your support will strengthen journalism in Nigeria and help sustain our democracy.

    If you or someone you know has a lead, tip or personal experience about this report, our WhatsApp line is open and confidential for a conversation


    Please enter your comment!
    Please enter your name here

    Support the ICIR

    We need your support to produce excellent journalism at all times.

    - Advertisement


    - Advertisement