Federal Government To Stop Providing Licenses To Gas Companies Without Pipeline Capacity

The federal government announced on Wednesday that it won't grant licenses to gas companies that were not capable of building pipelines for distributing gas.

The decision was made in order to prevent the transportation of compressed natural gas on roads. Minister of State for Petroleum (Gas) Ekperikpe Ekpo disclosed this decision during his visit to Abeokuta, the Ogun State capital, where a CNG explosion took place over the weekend.

A Gasco Marine truck carrying compressed natural gas (CNG) had a brake failure, crashed into a road barricade, and caught fire, leading to the death of one person and destruction of some vehicles.

Ekpo, who represented President Bola Tinubu during the visit, was accompanied by Governor Dapo Abiodun and his deputy Noimot Salako-Oyedele to investigate the accident's cause and offer condolences to the people of Ogun State.

The gas minister acknowledged the need to stop the transportation of gas on the road and instructed the head of the Nigerian Midstream and Downstream Regulatory Authority Farouk Ahmed to not provide licenses to companies unable to deliver CNG through pipelines to consumers.

"As the Federal Government, we are trying all that we can to ensure we reduce virtual transportation of gas because of the volatility of it, especially with the Ajaokuta–Kaduna–Kano pipeline," the minister said, Punch reported.

"I have directed the authority chief executive that for any further issuance of license, the company should be competent enough to pipe it to their end users so that we are not exposed to this kind of danger any longer."

Furthermore, he said that the ministry was trying to reduce a lot of virtual conveyance of gas. Hence, it was putting efforts into developing the "gas pipeline infrastructure so that the transportation would not be virtual, but rather through the pipelines," reducing this kind of incident and taking off the pressure on the road.

The minister also highlighted that using CNG-based vehicles is better than petrol.

Last month, the President Bola Tinubu-led administration announced that the government was all set to implement its CNG Initiative for Nigerians that will provide cheaper, safer and more climate-friendly energy to common people.