…move to save businesses up to 80% on fuel costs
…project to enhance mobility, create jobs, promote environmental sustainability
In a significant move to alleviate the pressure of rising fuel prices, the Edo State Government, through its Ministry of Mining and Energy, has launched a groundbreaking initiative to convert vehicles to run on compressed natural gas (CNG). This programme, which is part of a larger plan to drive energy reform, aims to make life easier for business owners and everyday commuters by reducing fuel costs, enhancing mobility, and promoting environmental sustainability.
The programme offers the first 1,000 motorists a free conversion of their fuel or hybrid vehicles, allowing them to shift from costly premium motor spirit (PMS) to CNG at zero cost. Beyond this, subsequent applicants will be enrolled in a flexible payment plan to convert their vehicles, making the switch to CNG affordable for everyone. Beneficiaries of the CNG initiative can still switch back to using fuel whenever they wish, simply by pressing a button added during the conversion process. The initiative also involves the construction of more CNG conversion centers and filling stations across Edo State, further expanding the accessibility of CNG to businesses and residents alike.
At a time when the cost of PMS has skyrocketed to ₦898 per litre, driven by inflation and market fluctuations, CNG offers a much-needed lifeline for businesses. CNG is currently priced at ₦200 per litre, providing a more stable and affordable alternative to traditional fuels. Business owners, particularly those in the transport and logistics sector, can realize up to 80% savings in fuel costs by switching to CNG. For small and medium-sized enterprises (SMEs), which form the bedrock of Edo State’s economy, these cost reductions can translate into significant financial relief, allowing them to allocate savings toward business growth, technology upgrades, or workforce expansion.
The recent surge in PMS prices has limited the ability of many business owners to travel, reducing their capacity to engage with clients and manage daily operations. For many, the high cost of fuel has become a barrier to effective commercial activity, leading to lost business opportunities and diminished profit margins. With CNG, business owners in Edo State can return to a level of mobility that fosters productivity and economic growth. This increased capacity for travel will enable businesses to serve customers more efficiently, manage supply chains, and tap into new markets.
One of the most important aspects of CNG is its safety profile, particularly when compared to domestic cooking gas (liquefied petroleum gas). Unlike cooking gas, which is highly flammable and poses significant safety risks, CNG is much safer to use in vehicles. The CNG production process ensures that it is less prone to combustion, and because it is lighter than air, CNG dissipates quickly in the event of a leak, reducing the risk of fire. This makes it a safer option for business owners and everyday motorists alike.
In addition to being safer, CNG is also a more environmentally friendly alternative to PMS and diesel. CNG-powered vehicles produce significantly lower emissions of carbon dioxide, nitrogen oxides, and particulate matter, making them a cleaner option that contributes to better air quality. This aligns with global trends toward green energy and supports Edo State’s efforts to attract environmentally conscious investors. As businesses increasingly prioritize sustainability, switching to CNG could also help companies align with their corporate social responsibility (CSR) goals.
The collaborative nature of this initiative, which involves private sector partnerships, also has broader economic benefits. The construction of CNG conversion centres and filling stations will create new jobs in Edo State, ranging from skilled technicians to engineers and administrative staff. These employment opportunities will stimulate the local economy, while the expansion of the CNG sector will likely attract further investment in Edo’s energy infrastructure. This public-private collaboration sets a strong precedent for future energy projects in the state, further enhancing Edo’s reputation as an investment-friendly region.
In an increasingly competitive market, cost efficiency is critical for maintaining profitability. For businesses in Edo State that adopt CNG, the potential for reduced fuel expenses means they can reinvest savings into other key areas, such as marketing, research and development, or expanding their workforce. By reducing operational costs, businesses can offer more competitive pricing or improved services, which will ultimately increase their market share. In a challenging economic climate where every naira counts, this competitive edge is invaluable.
The flexible payment plan introduced for businesses and individuals who convert their vehicles to CNG after the first 1,000 applicants further demonstrates the government’s commitment to economic resilience. This plan allows businesses to spread the cost of conversion over time, easing financial burdens and ensuring a smooth transition to CNG. By mitigating the immediate cost impact, the state government is ensuring that more businesses can benefit from the initiative without strain, contributing to a more resilient and sustainable business environment in Edo State.
Edo State’s CNG initiative is more than just a short-term solution to the fuel price crisis; it is part of a broader vision for energy independence and sustainability. As the state continues to invest in CNG infrastructure and promote alternative energy sources, it is positioning itself as a leader in Nigeria’s energy transition. The long-term benefits of this shift will not only enhance the state’s competitiveness but also reduce its carbon footprint, attracting environmentally conscious businesses and investors to the region.
The CNG conversion initiative by the Edo State Government is a forward-thinking solution that addresses both the immediate challenges posed by rising fuel prices and the long-term need for energy sustainability. Business owners who take advantage of this initiative will benefit from reduced costs, improved operational efficiency, and greater mobility, while also contributing to a cleaner and safer environment. The initiative is poised to boost Edo State’s economy, attract investment, and create jobs, making it a win for all stakeholders.
By promoting this innovative energy solution, the Edo State Government is ensuring that its business environment remains competitive, sustainable, and resilient in the face of future challenges. The CNG initiative is a testament to the power of collaboration between government and the private sector and highlights Edo State’s commitment to fostering an inclusive, business-friendly economy.
Osaze Ighoretin Ogbomo is the Team Lead Ease of Doing Business Secretariat-ESIPO, Benin City.
