…says 100,000 vehicles converted, $200m invested along value chain
The Federal Government’s Compressed Natural Gas initiative (CNGi) which seeks to lower the cost of living, especially regarding transportation and food for Nigerians, is revving up and has so far converted over 100,000 vehicles in the country to the use of the cheaper CNG/bi-fuel.
Government’s Compressed Natural Gas Initiative (CNGi) underway promises to cut fuelling expenses for commuter buses, haulage trucks and other vehicles by up to 75 per cent and cushion the cost of living by reducing the cost of transportation.
Analysts say that food prices would begin to noticeably trend downwards when up to 25 per cent of the 25,000 haulage trucks (being 6,250 trucks) required to move goods across the country are CNG-powered.
They further say that the downward progression in food prices would follow incrementally as the volume of CNG-powered trucks grows, reducing the burden of high food costs on the wallets of Nigerians, then freeing up disposable income for other pressing needs.
This is particularly significant following government’s removal of the troublesome fuel subsidy regime in May 2023 and the hike in food and transport costs on the back of rising fuel prices.
The selling point of the project is that Compressed Natural Gas (CNG) is significantly cheaper and cleaner than commonly used fuels petrol and diesel oil.
While CNG costs N213 per scm (standard cubic meter), petrol now costs in the range of N998 per litre and diesel, about N1,200 per litre, meaning CNG is less than 24 per cent the cost of petrol and 17.75 per cent the cost of diesel.
The presidency disclosed on Wednesday that since the launch of the Presidential CNG Initiative, over 100,000 vehicles have been converted from petrol to CNG/bi-fuel, saying more conversion centres are springing up across the country.
It stated that in addition, investors are ramping up the development and deployment of Compressed Natural Gas (CNG) infrastructure, with over $200 million already invested across the value chain.
A statement titled “Status Update on the Presidential CNG Initiative” issued by Project Director/CEO, Presidential CNG Initiative (PCNGI), Michael Oluwagbemi, said thousands of new jobs and economic opportunities were also opening up along the line.
Oluwagbemi said the statement became necessary to address certain misinformation regarding the PCNGI.
He stated, “As a response to the high cost of petrol and the attendant rise in the cost of transportation, following the removal of fuel subsidy, President Bola Tinubu launched the Presidential CNG Initiative to provide a cheaper and cleaner energy source for Nigerians.
“Since the launch of this ground-breaking initiative, the response has been positive as Nigerians are embracing and converting their petrol-powered vehicles to CNG-enabled vehicles – with over 60 per cent reduction in the amount of money they spend on fuel.
“To date, over 100,000 vehicles have been converted from petrol to CNG/bi-fuel-powered, and more conversion centres are being established across the country.
“In addition, investors are ramping up the development and deployment of CNG infrastructure, with over $200 million already invested across the value chain. Thousands of new jobs and economic opportunities are opening up along the line.”
The statement said Nigeria spent about $10 billion annually on subsidy, regretting that CNG, which has the potential to save the country $3 billion and adding $2 billion revenue to the national purse in the next three to four years, is now an issue of toxic debate.
It noted that one of the issues raised against the CNG initiative and its implementation was ease of conversion.
It said, “We see this as an opportunity rather than a challenge, and we are already deepening the development of CNG infrastructure with our partners.”
The statement explained that the number of conversion centres had risen from seven in 2023 to more than 140 across the country, and certainly not 50 centres as claimed by critics.
Oluwagbemi maintained, “In addition, more than 2,000 Nigerians have been employed in these conversion centres, with more jobs in the offing as CNG penetration ratchets up.
“In the past year, the private sector invested over N2 billion to establish these conversion centres, and another N6 billion to N10 billion will go into setting up more centres to meet the targeted 1,000 centres required to transform the nation’s energy dynamics.
“Second, there is no cost of conversion for commercial vehicles in Nigeria. It is free under the President’s Conversion Incentive Programme. The programme seeks to convert one million commercial vehicles to CNG/bi-fuel in the next three years.
“This is verifiable information as the National Union of Road Transport Workers (NURTW), whose members have benefitted recently issued statements acknowledging this fact.”
The PCNGI project director disclosed that with one million vehicles running on CNG, overall demand annually will be 220 million standard cubic feet of gas a day, or 2.75 per cent of the current daily gas production, of which only 16 per cent is consumed locally.
The statement said, “CNG distribution is also picking up with 75 new daughter stations under construction across the country, and additional containerised and mobile refuelling units are being set up by the private sector working closely with regulators.
“Mother station investments have totalled over $175 million in the past one year, with 65 new licences issued.
“Lastly, CNG conversion kits are suitable for older vehicles. The experience in Egypt, India, and Iran shows that old vehicles operate better and more efficiently on CNG than they would on petrol.
“Open loop non-sequential conversion kits exist for aged vehicles, and the PCNGI has succeeded in Lagos in fitting several old yellow buses with the kits – with videos of the beneficiaries to show.”
The statement said, “The claim that the government is not leading by example on CNG is false. On the contrary, the conversion programme started with government institutions, like the Nigerian Army and the Nigeria Police – through the Police Trust Fund. The programme has now expanded to other MDAs, like the Federal Road Maintenance Agency, the Ministry of Finance, and even the Federal Inland Revenue Service, as well as the PCNGI leadership team.
“More MDAs are signing up to the use of CNG for their vehicles.”
It said, “In addition, the federal government had already issued clear directives that only CNG-enabled vehicles should be purchased by government agencies. President Tinubu also directed that only such vehicles are to be approved by the Federal Executive Council.”
