Techno Oil GMD, Nkechi Obi Criticizes FG’s Policies on CNG, LPG

Olufemi Adeyemi 

Federal Government’s policies on Compressed Natural Gas (CNG) and Liquefied Petroleum Gas (LPG) cylinders have been criticized by Mrs. Nkechi Obi, Group Managing Director (GMD) of Techno Oil Limited.

During a panel discussion at the 2024 Nigeria Oil and Gas (NOG) conference held in Abuja, Obi openly expressed her dissatisfaction.

In a recent address, Obi emphasized the need for the government to reconsider the current zero import duties on LPG cylinders. She proposed reinstating the previous 40 percent import duties to discourage excessive importation and promote domestic production.

“It is imperative that we reverse the current policy in order to incentivize local producers. Unofficially, certain customs officers have indicated that Compressed Natural Gas (CNG), which the government seeks to promote in Nigeria, shares the same Harmonized System (HS) code as LPG.

“The import benefits initially granted to CNG equipment were subsequently extended to LPG equipment, resulting in both categories being subject to zero import duties.

“Harmonized System (HS) codes are extensively utilized in the import and export processes to categorize goods.

“In the context of Nigeria, the production of CNG cylinders is not currently feasible due to the requirement of advanced technological capabilities. However, the production of LPG cylinders is successfully carried out within the country.

“In order for us to manufacture CNG cylinders, we will need to modify one or two machines. We anticipate that the government will provide incentives to support our efforts in upgrading our technology to a capacity of 32, which is part of our strategic plan, she said.

Obi further urged the Federal Government to differentiate the HS code for LPG from that of CNG, thereby ensuring that importers of LPG incur higher import duties. This distinction would also facilitate the government’s ongoing efforts to maintain CNG’s affordability in the country through zero import duties.

“The previous administration implemented policies to safeguard domestic cylinder manufacturers by restricting imports, thereby promoting local production. However, the current government’s policy shift has altered this approach.

“We only benefited from that policy for six months before it was discontinued and replaced with the new ‘zero import duties’ policy.”

“Certainly, we must manufacture CNG cylinders, and the government must consider those who will participate in that production. However, if government policy is hindering our current LPG cylinder production, it will be challenging to transition to CNG cylinder production.

“If there are any opportunities to venture into CNG cylinder production, we, as producers of LPG cylinders, are prepared to undertake such a project and have already included it in our business plan.

However, we are discouraged from pursuing this venture due to our previous experiences in LPG cylinder production, which were negatively impacted by frustrating policies that encouraged the importation of LPG cylinders,” Obi explained.

July 05, 2024