Over two years after the Nigerian National Petroleum Company Limited (NNPCL) formerly Nigerian National Petroleum Corporation (NNPC) launched its autogas policy under the National Gas Expansion Programme, progress seems to have been at snail pace.
This has further been accentuated by the recent removal of subsidy on the Petroleum Motor Spirit (PMS).
In December 2020, the Federal Government kick started the initiative aimed at converting one million vehicles from petrol to gas utilisation.
The Group Chief Executive Officer of the NNPCL, Mr. Mele Kyari had described the move as a palliative measure to cushion the impact of subsidy as agreed with the organised Labour.
Also, in January 2022, Kyari met with oil marketers in the downstream sector to perfect plans for the full deployment of autogas in filling stations and the conversion of 200,000 commercial vehicles to run on gas.
At the meeting, which was convened by former Minister of State for Petroleum Resources, Timipre Sylva, the government unveiled the 2022 Framework for the deployment of Compressed Natural Gas (CNG) also known as autogas in Nigeria.
Sylva disclosed that the government was out to ensure that it made available the alternatives required before the removal of subsidy on PMS stressing that the deployment of autogas was one of such key alternatives.
According to him, CNG was selected as the fuel of choice because it holds a comparative advantage, due to its ease of deployment, its comparatively lower capital requirements, commodity’s supply stability, existing in-country volumes, and local market commercial structure which relies predominantly on the naira.
In the framework, one of the three implementation options, targeted the conversion of one million public transport vehicles and install 1,000 refueling centres within 36 months.
For the first 18 months it targets to achieve 500,000 conversions and 580 refueling centres supplied by five Original Equipment Manufacturers, among other targets.
In the plan, the government targeted converting 200,000 commercial vehicles in 2022, including tricycles, cars, mini-buses and large buses.
The cities captured in Phase 1 of the project include Abuja, Kaduna, Kano, Kogi, Kwara, Lagos, Ondo, Oyo, Edo, Delta, Bayelsa, Niger, and Rivers.
Cities under Phase 2 were listed as Sokoto, Katsina, Jigawa, Borno, Bauchi, Gombe, Yobe, Osun, Ekiti, Enugu, Anambra, Imo, Cross River, Abia, Akwa Ibom and Plateau. For Phase 3 cities, they were listed as Kebbi, Zamfara, Yobe, Gombe, Taraba, Adamawa, Benue and Ebonyi
However, the initiative seemed to have stalled even as some Nigerians are now beginning to convert to using gas to power their vehicles as well as generating sets.
Meanwhile, the PwC in its latest report titled: “Fuel subsidy in Nigeria- issues, challenges and the way forward” recently released, said the adoption of CNG as alternatives will bring lower cost, reduced emissions, and improve fuel efficiency.
It said: “One of the most significant benefits of CNG is that it is considerably cheaper than petrol, which could result in substantial savings for vehicle owners. Additionally, the cost of CNG is more stable than the volatile price fluctuations experienced by petrol.
“Also, the use of CNG could reduce vehicle maintenance cost due to its cleaner burning properties, which produce fewer engine deposits that clog up the engine over time.”
However, it said the adoption of CNG in Nigeria also presents some challenges which include the initial investment required to retrofit existing vehicles with CNG engines, the need to establish a robust distribution infrastructure for CNG, and the need for government policies and incentives to promote the use of CNG.
“While CNG presents a number of benefits compared to PMS, there are challenges to its adoption making it an unlikely alternative to petrol in the short to medium term,” it concluded.
Oil and Gas expert, Mr. Michael Faniran said CNG is a viable alternative to petrol based on the current pricing noting that:”with the current deregulated price of PMS, CNG is a cheaper alternative to PMS and commercially viable to invest in the business. Also, in terms of pollution control, CNG is a cleaner fuel.”
However, he noted that the previous government’s efforts on conversion of vehicles to autogas did not materialise,”because it was not bankable from investor point of view when PMS was still subsidised.”
On his part, Prof. Adeola Adenikinju, Director, Centre for Petroleum, Energy Economics and Law said the use of CNG is one alternative way of deepening the local utilization of the country’s massive gas resources rather than flaring or exporting.
He stressed the need for car owners to consider the switch to autogas even as he urged state governments to also tap into the programme.
His words:”With the current policy of fuel subsidy removal, the CNG becomes a very attractive alternative that vehicle owners can use to mitigate the effects because gas is cheaper than petrol if we are able to successfully encourage and provide infrastructure for the use. I hope that the state governments, not only Federal should tap into this.”
Meanwhile, the FG had in 2022 disclosed plans to support with 50 percent of the conversion kits to fast-track the process of co
While reacting to this, the national spokesperson for the Independent Petroleum Marketers Association of Nigeria (IPMAN), Mr. Chinedu Ukadike said although the government came with various strategies and funding supports that were stalled.
“Those promises were just like policies. If you go to Eastern zones, no filling station has been empowered to convert vehicles to CNG except for one or two places in Abuja and Lagos,” he said.
He noted that the government would have provided, “technical committee or workshop whereby managers of these organisations can go there and learn and be trained so they will be able to convert vehicles and motorists who always patronise them in their filling stations so that we can have a seamless movement from a petrol reading carburetor to compressed natural gas combustion.”
However, he said removal of Subsidy will promote the use of CNG which will in turn reduce the pressure in PMS.
“Since we produce CNG here and we don’t even have enough facility for storage so if governments would be able to radically increase orientation on CNG it would have helped force down the price of PMS as an alternative,” he added.
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