Subsidy Removal: FG To Launch CNG Buses, Tricycles In May

Nmesoma Okwudili


April 28, 2024

In a significant move to address the ramifications of removing fuel subsidies, the Federal Government of Nigeria is poised to introduce a groundbreaking initiative centered on compressed natural gas (CNG). Slated to launch in May, this initiative marks a strategic response to President Bola Tinubu’s pledge to phase out fuel subsidies, a decision that has shifted the energy landscape and impacted consumer costs.

President Tinubu’s inauguration marked a watershed moment when he declared an end to the era of fuel subsidies. This pivotal policy shift precipitated a surge in fuel prices, necessitating proactive measures to mitigate its socio-economic impacts. Central to this mitigation strategy is the introduction of CNG-powered mass transit buses and tricycles, aimed at cushioning the effects of the subsidy removal on the populace.

As articulated by presidential aide Bayo Onanuga, the forthcoming initiative embodies a comprehensive approach to sustainable transportation solutions. With an initial focus on the production of over 600 CNG buses, coupled with the establishment of a new assembly plant for tricycles along the Lagos-Ibadan Expressway, the government seeks to bolster public transport infrastructure. Collaborative efforts with international partners, notably Chinese manufacturers, underscore the global dimension of this endeavor, aimed at bolstering local capacity and fostering technological transfer.

The envisioned rollout encompasses an ambitious procurement plan involving 5,500 CNG vehicles, including buses and tricycles, supplemented by the integration of 100 electric buses. Moreover, the distribution of over 20,000 CNG conversion kits underscores the commitment to facilitating the transition towards cleaner energy alternatives. This multifaceted approach extends beyond mere vehicle procurement, involving the development of essential infrastructure such as CNG refilling stations and electric charging points, which are critical for the long-term sustainability of the initiative.

Crucially, the government’s commitment to facilitating private sector participation through tax incentives and duty waivers underscores the collaborative ethos driving this initiative. With over $50 million mobilized from private stakeholders, including investments in refueling infrastructure and conversion centers, the public-private partnership model emerges as a linchpin for realizing the initiative’s objectives.

In addition to enhancing public transport accessibility, the initiative extends support to commercial operators seeking to transition from petrol-powered vehicles to CNG. Through the provision of subsidized conversion kits and CNG cylinders, the government aims to alleviate financial burdens on commercial vehicle operators, thereby fostering the widespread adoption of cleaner energy solutions.

Amid negotiations with labor unions over the fallout from subsidy removal, President Tinubu’s administration remains steadfast in its commitment to implementing structural reforms. The provision of temporary relief measures, including pay increases for federal employees, the suspension of VAT on diesel, and social security cash transfers to vulnerable segments of society, underscores the government’s proactive stance in addressing socio-economic challenges.

As Nigeria embarks on this transformative journey towards sustainable energy, the launch of CNG buses and tricycles heralds a paradigm shift in transportation dynamics. By embracing innovative solutions and fostering collaboration between the government and private stakeholders, Nigeria charts a course towards a greener, more resilient future characterized by enhanced mobility and a reduced environmental footprint.
FG to launch 2,700 CNG buses, tricycles before Tinubu’s first anniversary – Presidency

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