The Major Oil Marketers Association of Nigeria (MOMAN), has said that blending ethanol with fuel during domestic refining will reduce the pump price of fuel by N49.
MOMAN Executive Secretary, Mr Clement Isong also said that the ethanol production value chain has great opportunities for Nigeria.
He spoke on the sidelines of a ‘Policy Intervention series on alternative fuel’ by BusinessDay in Lagos. The series had the theme: Exploring alternative energies.’
Isong also said the adoption of alternative energies will substantially reduce or mitigate the impacts of the high cost of fuel.
He stated that the government, operators in the industry and consumers, have roles to play in reducing energy costs.
He also called on the government to ensure that payments are made in naira rather than in dollars for some government agencies like NIMASA.
According to him, such would reduce the pressure on the foreign exchange and pump price.
The MOMAN Executive Secretary said the filling station of the future will transcend its traditional role as a refueling point for vehicles.
He added that instead, it will evolve into a dynamic hub offering a diverse range of cleaner energy options.
According to him, these stations will no longer rely solely on traditional fossil fuels but will provide consumers with a wide array of sustainable energy choices.
He said that the Policy Intervention Series on Alternative Fuel underscored the pivotal juncture at which Nigeria’s energy sector stands.
According to him, removing subsidies, coupled with strategic policy interventions and industry collaboration, has the potential to reshape the nation’s energy landscape into a more sustainable and prosperous future for all.
Isong said, “It is the best time for operators to make contributions towards policy formulation and creation as well as steps towards policy implementation and execution. One of the advantages of appropriate fuel pricing instead of subsiding it and making it artificially cheaper is that by pricing it at its correct price, alternative energies become more attractive to the consumer. But the consumer, because he has been bottle-fed with fuel for the last 50 years, is not aware of the opportunities available for his alternative energies.
“For instance, ever since subsidy has been removed, people will be surprised to hear that the use of solar has increased exponentially. Those people who are involved in providing solar for home systems or solar for small-scale businesses, or use solar for hybrid systems for large businesses said that there is a significant increase.
“On solar energy we had people talk about the opportunity of compressed natural gas (CNG), Liquified Petrol Gas (LPG), and savings. If you introduced ethanol at, for instance, a level of e-10, the savings is N49 per litre meaning that if you blend your petrol in Nigeria with ethanol, the gain is about N49 per litre. But more importantly, the opportunities for farming are quite high. Whether it is wheat which is abundant in the north or cassava which is abundant in the south, the opportunities are huge, Imagine the many hectares with cassava or maize and apart from eating it, it is also available for agro-processing into ethanol where it serves to reduce the consumption cost of fuel.
He added, “But like we are also saying to the government, there are some costs that are unnecessary, serving NIMASA in dollars when the dollar is not available forces people to go and buy it at a parallel market at a higher cost. And that higher cost goes into the pump price. So there are areas of optimisation, areas of improving efficiency, areas of cost savings that the high price will force all of us as a people to look into.
“There is a role of government to reduce the cost by, for instance, interventions in alternative energies and from changing from dollar pricing to naira pricing. There is an opportunity for operators to reduce their distribution costs, and operation costs in their filling stations by moving to solar rather than using diesel to power their stations. There is an opportunity for the consumer to change his energy mix and reduce his energy cost. Those opportunities are ready and available today and that was what today was about, to show the consumers and everybody that there is a role to play in making the subsidy removal a success.
“The opportunities for alternative energies are there. The high cost of petrol and diesel forces all of us to make a decision because people must make decisions and analyse their choices. He is not forced to use one energy source. For his cooking, he can use LPG, for his transport, he can go public transport with CNG transport; he can replace his small generator with solar, biofuel will reduce his fuel cost where he is to buy fuel. Everybody can reduce their energy cost. Everybody can contribute to exchanging energy mix to what is more efficient, particularly so, if all energies are priced appropriately.
“You remember that we have heard fifty years of subsiding petrol. So if the government were to focus its intervention rather in supporting the startup of all these other energies which are already able to compete because the petrol price is so high, if the government were to help with the conversion, which is a thought targeted intervention rather than the old intervention in fuel subsidy which almost killed the country, you will find that it will move more quickly towards an energy mix that is more evenly balanced and more palatable to consumers. It is the same way for operators of businesses and even oil marketers.
“Marketers must work with their transporters to reduce their distribution cost. We can simply continue to use diesel when it is so expensive. Marketers must look for any other way to reduce its cost.”
