The Presidential Compressed Natural Gas Initiative (Pi-CNG), is no doubt facing the uphill challenge of driving the responsibility it is saddled with which is providing alternative fuel for the driving public.
The Pi-CNG, is a component of the palliative intervention of the President Bola Ahmed Tinubu administration directed at providing succor to the masses occasioned by the transitive hardships of the fuel subsidy removal policy of the Federal Government of Nigeria.
The Agency aims to raise $25 million in to cover its pilot phase, $75 million by the end of 2024, and $250 million by 2027 to support the development of CNG infrastructure for Nigeria.
The pilot program started with 21,000 units and 10 participants workshops and it projects that by end of 2024, it will reach 150,000 units and 250 participants workshops.
Looking ahead to 2027, it projects to achieve 1 million units and 500 participants workshops.
By and large with the articulated intervention of the agency it is exciting to note that Nigeria’s transport sector is set for a major transformation with the adoption of CNG as an alternative fuel.
The removal of the petrol subsidy in 2023 has increased government initiatives like the Presidential Compressed Natural Gas Initiative (Pi-CNG) to promote CNG use.
This shift offers numerous advantages, including reduced costs, lower carbon emissions, and less vehicle wear and tear and other benefits that appeal to both consumers and transport operators.
The shift to CNG aligns with Nigeria’s broader goals of economic resilience, energy independence, and environmental sustainability.
By reducing reliance on traditional fossil fuels which are mostly imported, CNG could save Nigeria billions annually and foster job creation through the development of CNG infrastructure.
Its lower carbon footprint also supports the country’s commitment to global climate action and the Sustainable Development Goals (SDGs).
This move towards CNG marks a step towards a cleaner, more efficient, and economically viable future for Nigeria’s transport sector.
As the country navigates this transition, CNG could pave the way for a new era of sustainable energy use in transportation.
Conceiving Initiative
The federal government proposed the use of compressed natural gas (CNG) as an automotive fuel in 1997 as part of the initiatives to harness natural gas (NG) resources but progress has been slow.
Nigeria hopes to build on the natural gas vehicle (NGV) implementation approaches and outcomes adopting other countries diverse experiences in order to gain an understanding of the barriers to the NGV market development.
Some industry experts who have deeply assessed the country’s policy direction and implementation strategies using analysis which employed hermeneutic principles to secondary data derived from academic literature, published reports from a variety of international agencies, grey literature, and text from online sources and identifies eight success factors for NGV market development have expressed worries about lack of structure in the Nigerian case.
Success factors known to have been identified in countries that have adopted CNG as alternative automotive fuel includes, strategic intent, legal backing, learning and adaptation, assignment of responsibilities, financial incentives, NG pricing, consumer confidence, and NG infrastructure.
According to analysts the principal impediment to NGV market development in Nigeria is the uncoordinated implementation approach and that greater government involvement is required in setting strategic goals, developing the legal and regulatory frameworks, setting of clear standards for vehicles and refuelling stations as well as assigning responsibilities to specific agencies. Short-term low cost policy interventions identified include widening the existing NG and petrol price gap and offering limited support for refuelling and retrofitting facilities.
The Pi-CNG is not unaware of these challenges but haven’t been assigned the responsibility the agency though fatigued by clear evidence of lack of financial resources, incentives and gas infrastructure is undaunted and is struggling to navigate the enervating challenges of the time.
This is a clear evidence of the absence of legal backing, inadequate government support, insufficient price advantage, misplaced priority and non-alignment of stakeholder interests.
It has been advocated that government has to play a more central role, set strategic goals, formulate policies, establish the necessary legal and regulatory frameworks and assign responsibilities to relevant agencies in order to develop the market and encourage the entry of both local and global players.
Stating The Future Gains
President Bola Tinubu relying on data said the Compress Natural Gas (CNG) initiative will save the country over N2 trillion in funds used in importing Premium Motor Spirits (PMS) or petrol and Automotive Gas Oil (AGO) into the country.
The President stated this in reaction to protests that have erupted across the country over the rising cost of living and hardship.
Tinubu called on Nigerians to stop further protests and engage in dialogue stating that the administration has embarked on initiatives meant to assuage the cost-of-living burden on Nigerians.
He mentioned that the CNG initiative launched last year will reduce the cost of transportation by 60 per cent and will translate towards reducing inflation in the country.
He also noted that his administration will distribute conversion kits at very low cost to commercial transporters who move people and goods and are responsible for about 80 per cent of PMS consumption in the country.
He said, “Fellow Nigerians, we are a country blessed with both oil and gas resources, but we met a country that had been dependent solely on oil-based petrol, neglecting its gas resources to power the economy. We were also using our hard-earned foreign exchange to pay for and subsidise its use.”
“To address this, we immediately launched our Compressed Natural Gas Initiative (CNG) to power our transportation economy and bring costs down. This will save over two trillion Naira a month, being used to import PMS and AGO and free up our resources for more investment in healthcare and education.”
“To this end, we will be distributing a million kits of extremely low or no cost to commercial vehicles that transport people and goods and who currently consume 80 per cent of the imported PMS and AGO.”
NATIONAL ECONOMY reports that following the removal of the fuel subsidy on May 29, 2023, Tinubu launched the Presidential CNG Initiative in October to provide more affordable, safer, and environmentally friendly energy.
This initiative focuses on supplying compressed natural gas primarily for mass transit.
To alleviate the burden of rising fuel prices, the Federal Government allocated N100 billion from the N500 billion palliative budget to purchase 5,500 CNG vehicles (buses and tricycles), 100 electric buses, and over 20,000 CNG conversion kits.
In the first quarter of 2024, Nigeria spent around N2.6 trillion in petrol imports an increase of 46 per cent compared to the figure for the immediate past quarter, according to data from the National Bureau of Statistics (NBS).
Dealing With Infrastructure Gap
The Group Chief Executive Officer of NNPC Limited Mallam Mele Kyari, said that the drive to bring Compressed Natural Gas (CNG) closer to Nigerians has since commenced and is irreversible.
Kyari, who disclosed this during the simultaneous commissioning of 12 CNG stations in Abuja and Lagos, said in addition to the massive deployment of CNG stations nationwide, the NNPC Ltd and its partners would also build three Liquefied Natural Gas (LNG) stations in Ajaokuta.
“There is simply no way to turn back on delivering CNG for all Nigerians. It is the right thing to do. Is it late? Yes, but we will make progress, we will cover the gap in order to ensure that the volatility we see with Premium Motor Spirit (petrol) does not apply to gas,” Kyari stated.
The GCEO commended President Bola Ahmed Tinubu for providing the needed support to drive domestic gas utilisation aimed at delivering cleaner and cheaper source of energy to Nigerians.
While assuring that the NNPC Ltd will continue to deliver more strategic gas projects for the benefit of Nigerians in line with the Presidential CNG Initiative of bringing prosperity to all Nigerians, Kyari reaffirmed the determination of the NNPC to guarantee the nation’s energy security.
“It’s already a work in progress, we will construct six CNG mother stations, spread across the country, between now and December, you will see this happen.
“We are also taking another step. We are building LNG stations in Ajaokuta, belonging to us, two with a partnership. What this does is to bring CNG closer across the country.
“Distance matters in transporting gas and that’s why we are doing this so that it becomes accessible and becomes easier and this is short term because as soon as we complete the AKK pipeline, it gets much closer to end users, and ultimately as we reduce the distance, cost will come down.
“We will see cheaper and cheaper fuel across the country, particularly areas that are distant from the source of the gas, especially in the northern part of the country”, he stated.
With this in place, he stated that Nigerians will find it cheaper to fuel their cars, with CNG becoming an alternative to expensive petrol price.
“And I would like to also indicate that there’s no turning back on this. There’s simply no way to turn back because this is the right thing to do,” he added.
Also speaking, the Managing Director of NNPC Retail, Huub Stockman, stated that Nigerians will save at least 40 per cent of their expenses on fuel by converting their vehicles to CNG-powered ones.
“We’re also supporting our implementation partners to set up two mechanical training centres combined with conversion centres in Abuja and Lagos. And it’s fantastic that Nigeria is utilising its own natural resources to bring affordable energy to the people of Nigeria,” Stokman pointed out.
Stokman revealed that in the next one year, NNPC Retail would have launched over 100 CNG sites, including 16 NNPC Gas Marketing and NIPCO Gas JV sites.
“CNG provides Nigeria with affordable alternatives to existing available fuel products. It will be about 40% cheaper than petrol in Nigeria and with continued investments, it will become a significant part of our energy mix,” Stokman added.
The Programme Director of the Presidential CNG initiative, Michael Oluwagbemi, said that there will be huge savings from the deployment of CNG.
“When you look at CNG on the other hand, to every car owner, if you move to CNG, at 250 litres of it, looking at the pricing today, between CNG and PMS (petrol), you’d be saving about N6 million per annum, from nowhere.
“Now if you look at this, a lot of people who are already converted, they’re saving about N200,000 at the end of every month or about N380,000, depending on how much CNG they’re using.
“So that is on one car, that is N12 million saved on every vehicle, that is going into PMS. Now if you look at the Keke NAPEP, which is the means of transport for many people, and it’s a whole lot of business for a lot of people, the average savings per day would be about N7,000 using CNG.
“That translates to about N2.6 million per annum, for a Keke owner, if he moves from PMS to CNG. It may surprise you that the cost of a Keke NAPEP is actually N2.7 million, so that in one year’s savings on CNG, you can buy another Keke,” he argued.
Minister of State for Petroleum Resources (Gas), Rt. Hon. Ekperikpe Ekpo said the commissioning of the stations will not only provide economic benefits by creating jobs and stimulating local economies, it will also contribute significantly to Nigeria’s national goals of reducing emissions and combating climate change.
Equally, the Chairman of the NNPC Board of Directors, Chief Pius Akinyelure said increased CNG adoption will foster economic benefits by reducing fuel costs for consumers and businesses alike.
Following the removal of fuel subsidy and the declaration of the Presidential Compressed Natural Gas (CNG) initiatives, NNPC Limited has taken the lead in the deployment of Auto-CNG Stations across Nigeria.
Already, NNPC Gas Marketing Limited, a subsidiary of NNPC Limited, in partnership with NIPCO Gas Limited has developed an Auto-CNG rollout plan for construction of thirty-five (35) CNG stations across the various geographical zones of Nigeria.
Providing Free Conversion Kits To Commercial Vehicles Operators
Interestingly, government has ordered 1 million free CNG conversion kits to be distributed to commercial vehicles involved in transporting people, food and goods.
These kits, along with free installation, has commenced in
Lagos where the Pi-CNG has reliable partners involved in the conversion process.
In phase one of the initiative, Pi-CNG has commenced the distribution of 10,000 free conversion kits.
These kits will be provided at no cost to transport operators through key national transport associations, including the National Union of Road Transport Workers (NURTW), Moove, UBER and the Kaduna State Transport Authority (KSTA).
This is to allow commercial drivers to switch their vehicles to run on CNG, thus easing the cost burdens for both transporters and the public.
The distribution process is supported by Pi-CNG in partnership with NIPCO Gas, Dana Motors, Portland Gas and AutoGIG, in Lagos.
They will manage the conversion process through a network of authorised conversion centres across Nigeria. These centres will provide the necessary infrastructure and services to ensure a smooth transition for vehicles switching to CNG.
According to the Pi-CNG, the CNG adoption would position Nigeria towards embracing a cleaner, cheaper and more sustainable fuel alternative that benefits both the economy and the environment.
The government’s goal is to distribute the full 1 million conversion kits by the end of 2025, ensuring that Nigeria’s commercial transport sector is fully equipped to adopt CNG and reduce dependence on costly petrol and diesel.
Some of other 184 active conversion centres include Kojo Motors, Surulere; OttoXpress Limited, Ikoyi; AutoMedics Limited, Ilupeju; Briscoe Nigeria Plc, Rivers; Rolling Energy Limited, Kwara State; Nsik oil and gas company, Akwa Ibom, NITT, Gombe, NITT, Ekiti; NIPCO Gas, Ibafo; NIPCO Gas Ltd, Abuja; NIPCO Gas, Sapele; and BOVAS in Idinmu-Ikotun, Lagos among many others.
Speaking at the distribution ceremony in Lagos last week the Commercial Operations Manager of the Pi-CNG, Omo Imoukhuede, said that the initiative aims to convert one million commercial vehicles from petrol to CNG by 2027, in alignment with the President’s mandate.
According to Imoukhuede , the conversion and installation are free for commercial operators, with a 50 per cent subsidy on the cost of conversion kits. We’re here at Portland Gas, to deliver 50 kits.
One thing is clear, we are pushing this initiative to ensure that conversion centers are accessible to all.
“The key words are awareness and adoption. Once that is set in motion, especially in the mindset of Nigerians, we’re ensuring that kits are available across the board. The end result is bright. Nigerians should be happy and rejoice that we have enough gas to sustain us. Why can’t we convert that to energy to power our transport system? This is a testament to Mr. President’s direction and vision, pushing through the initiative so that each and every one of us can benefit. There’s hope for us,” he said.
At different centers, we have sensors that can handle between 15 to 20 conversions per day. Imagine if we have those conversion centers across Nigeria; you’re looking at a significant turnaround time. When you multiply that by the number of conversion centers we have, within the next year, a considerable number of cars—both small vehicles and buses alike—can be converted,” he added.
He further explained, “The plan with the initiative is to ensure the availability of kits is 100 percent in place. We have kits in port that are being rolled out. The specific strategy is to ensure that once these kits become available, execution will be instant, which is paramount for us. The turnaround time is very important. We are definitely going to ease the stress on every Nigerian with this initiative. For commercial vehicle owners, the conversion is free, and the kits are 50 percent subsidized. The initiative and incentive program are pushing through free conversion for commercial vehicles that kick off in Abuja. We are working with transport associations. Nigerians will start feeling the impact of these initiatives. In the vision of Mr. President, our mandate is clear, and we have partners across the value chain.”
Chief Operating Officer (COO);of Portland Gas, Michelle Ejiofor, recommends more private sector participation to ensure realization of the set objectives.
She said the initiative will help in reducing emissions and cost of transport as gas prices are cheaper than petrol.
At Dana Motors, Chief Commercial Officer of the company Mathews Kuruvilla, commended governments initiative to drive down emissions and reduce cost of transportation with the introduction of CNG.
On his part, managing director of AutoGIG, Tola Ojo, says the initiative offers huge business potential for investments in CNG-powered vehicles.
He said the investment opportunities in the use of natural gas were enormous, adding that this had received a boost with intervention of government.
Ojo said that governments policy on gas infrastructure development tallies with global best practices in the use of cleaner energy for environmental sustainability.
