The Special Adviser (SA) to President Bola Tinubu on Energy, Olu Verheijen has revealed that over 70 per cent of the nation’s gas reserve remains underdeveloped, thereby stalling the Compressed Natural Gas powered vehicles project.
Verheijen disclosed this during the ministerial press briefing in Abuja on Friday organised by the Federal Ministry of Information and National Orientation.
She highlighted the need to address the fundamental issues, in Nigeria’s oil and gas sector, which she said insufficient gas supply is among the major issues.
Furthermore, Verheijen explained that there is an existing fund, created and ready to make investments in gas infrastructure.
“There are lots of investors who are very interested in making investments in infrastructure, but it’s like building a road without having a car to drive on it. You cannot invest in infrastructure to compress gas if there is no gas.
“We need to address the fundamental issues in sectors so that we can attract capital to the infrastructure and there is no one who is going to invest in midstream infrastructure if they don’t have assurance or line of sight to the attractiveness of gas supply.
“So if the gas suppliers are not making investments because the fiscal terms or the business environment is a very difficult one in which to invest, then it will be very difficult to continue to mature midstream projects and downstream projects because you have to deal with the Abinitio problem which is gas supply.”
ALSO READ: Anambra youths protest ‘delayed justice’ for slain community leader, Onyima
Explaining further, the Presidential Aide said that to boost the nation’s capacity for gas supply, President Tinubu recently issued some policy directives, including the introduction of fiscal incentives to deepen compressed natural gas, and liquefied petroleum petrol penetration.
She said these incentives were designed to ease the impact of fuel subsidies on transport and enable the displacement of PMS and diesel.
Verheijen noted that the directive also aims to stabilise the price of cooking gas in the market and support the transition to clean cooking.
“That is exactly what President Bola Tinubu has done with fast-tracking these policy directives to ensure that we have sufficient gas supply whether we’re trying to export to a get Trans Sahara gas pipeline, whether we’re trying to compress natural gas or liquefied for domestic use, whether we’re trying to have floating LNG as alternative ways of getting gas into the market. All of those things are enabled by these policies that unlock supply,” she said.
She, however, maintained that the government had stopped the payment of subsidy following the pronouncement of President Tinubu on May 29, 2023.
Verheijen pointed out that the government has the prerogative to maintain price stability and prevent social unrest.
“So if prices are moving, they reserve the right to intervene. It was done in the US during COVID-19, there was a lot of interventionist moves that are also subsidies.
“All governments reserve that right and so if for whatever reason the Tinubu-led administration has reviewed that it is not the right time to have prices continue to fluctuate, given the level of hardship in the country, given inflation, the government has the right to intervene intermittently, all governments do so but it does not negate the fact that the subsidy was removed.”
NIGERIAN TRIBUNE