The Department of Petroleum Resources said gas station prices in Nigeria could rise to #1000 per liter if the gasoline subsidy regime ends without alternative energy sources.
This was conveyed by the Director of the DPR Sarki Auvalu when answering questions and comments on the report he had just submitted to Lagos in the second quarter of 2021, a business lunch at the Petroleum Club Lagos.
Responding to concerns about subsidies and discrepancies in gasoline consumption figures from the Nigerian National Petroleum Corporation and the DPR, Auwalu acknowledged that Nigeria is spending so much on gasoline subsidies.
He said that it was necessary to provide alternative fuels for Nigeria and this could force Nigeria to pay higher gasoline prices if subsidies were removed.
According to a statement on Monday on the DPR website, titled, “DPR: Without Alternative Energy, gasoline prices will rise if subsidies are removed Auwalu said, Nigerians can pay up to N1,000 to buy a liter of petrol in the country if fuel subsidies are also removed when alternative energy or gas policies are fully operational.
However, he said the alternative fuel system had an initial cost as it would cost $400 to convert a vehicle from gasoline or diesel to using liquefied natural gas or compressed natural gas.
He said, “To remove subsidies, stop calling them subsidies, it’s not enough to bring back purchases. So to eliminate insufficient recovery, alternative fuels are needed. Without alternatives, you are exposing people to higher prices and that is why we adhere to freedom from price.
“There are currently 22 million cars in Nigeria. Eight million are for general use. Imagine the average cost to convert if you wanted to convert any car to gasoline. Convert from.” eight million cars costs $3.2 billion, and for that purpose there are plenty of environmental investors who can invest and bounce back from gas sales, and we encourage that.
“Once that is reached, you will see that PMS can be sold for N1,000. After all, the average distance traveled in one gallon of LNG or CNG in terms of energy for mobility is 2.7 to one. One for PMS, 2.7 for LNG or CNG.
So with these benefits you will see that this in turn is an opportunity for the industry. The issue of subsidies, volume will be lost and that’s what we’re working on. “