By Gideon Osaka
Recent developments within the Compressed Natural Gas (CNG) space particularly the mass deployment of CNG stations, CNG-powered cars, motorcycles and other CNG-based initiatives, have shown strong signs of the President Bola Tinubu-led administration’s faith in CNG as an alternative fuel to cushion the pain being felt by Nigerians from the sharp increase in the overall cost of living occasioned by the removal of fuel subsidy and the naira devaluation.
To effectively incentivize and accelerate the transition from petrol to CNG adoption and other gas-based fuel, the government inherited and also kick-started new initiatives to drive full CNG adoption. A year ago, the government launched the Presidential CNG Initiative (PCNGi) as “a component of the palliative intervention directed at providing succour to the masses given the hardship caused by the removal of fuel subsidy. In particular, the PCNGi was meant to lower transportation costs for Nigerians by enabling the powering of motor vehicles (and industries) with cheaper, cleaner, safer and more reliable domestically produced natural gas.
The target of the program was to start by making available 21,000 conversion kits at 10 participant workshops to get Nigerians to retrofit their petrol and diesel-powered vehicles run on CNG. By the end of 2024, it hoped to reach 150,000 units with 250 participant workshops. By 2027, it would have achieved 1 million units through 500 participant workshops. For buses and tricycles, the initiative was to take off with 5,500 vehicles with the expectation to finance 200,000 new ones across Nigeria. PCNGi also has a plan to establish conversion centres all over Nigeria. It projects 10 such centres at the start and would drive to 100 at the end of 2024, with 1000 in view by the end of 2027.
Although the quest to transition from petrol to gas started with the administration of Muhammadu Buhari, with the rollout of CNG as a key transport fuel part of the government’s strategy to gradually wean the nation off petrol, grow the country’s domestic gas supply and key into the global shift from crude oil to gas. The government launched the National Gas Expansion Programme (NGEP) on December 1, 2020, with a focus on the distribution of autogas (CNG) and liquefied petroleum gas (LPG). The program was part of a broader initiative to encourage vehicle owners, especially those in public transportation, to switch from petrol to CNG. Added to this, was the Autogas Policy, approved in 2023, to promote the use of CNG, LPG, and LNG (Liquefied Natural Gas) in vehicles. Under the policy, the government has been retrofitting fuel stations to provide CNG refueling and grants for businesses involved in producing conversion kits. The Autogas Program, under the NGEP, encompasses not just CNG but also other forms of gas, such as LPG and LNG. The idea is to provide Nigerians with a variety of cleaner fuel alternatives, which would allow users to pick the most convenient and affordable option based on their needs.
Another initiative the current government has followed through is the CNG Refueling Stations Expansion initiative where partner companies like NIPCO Gas and the Nigerian National Petroleum Company Limited (NNPCL) are setting up CNG refueling stations in major cities such as Lagos, Abuja, and Benin. The goal is to expand the network across the country to make CNG a practical fuel choice. NIPCO, one of the major private players in the CNG space, has invested heavily in setting up refuelling stations and conversion kits. NNPC Limited has taken the lead in the deployment of Auto-CNG Stations across Nigeria to bring CNG closer to Nigerians, it has since commenced the simultaneous commissioning of 12 CNG stations in Abuja and Lagos, adding to the massive deployment of CNG stations nationwide.
In the next one year, NNPC through its retail arm, would have launched over 100 CNG sites, including 16 NNPC Gas Marketing and NIPCO Gas JV sites.
Already, NNPC Gas Marketing Limited, a subsidiary of NNPC Limited, in partnership with NIPCO Gas Limited has developed an Auto-CNG rollout plan for the construction of thirty-five (35) CNG stations across the various geographical zones of Nigeria.
As part of its efforts to accelerate the adoption of CNG as a cleaner and more affordable fuel, the company in October sensitized over 1,000 auto mechanics through a comprehensive awareness initiative. The sensitization exercise which took place at the National Artisans and Technicians Conference held recently in Lagos, brought together auto mechanics and technicians from across the country. The engagement aimed to demystify the process of converting gasoline-powered vehicles to CNG and encourage the adoption of sustainable energy solutions. The NGC (Nigerian Gas Company), a subsidiary of NNPCL, has been actively involved in setting up CNG distribution hubs and providing technical support for infrastructure development.
Similarly, the National Agency for Science and Engineering Infrastructure (NASENI) has also unveiled plans to convert millions of vehicles from petrol and diesel to cleaner forms of electric vehicles and CNG-powered vehicles in a move to support the conversion of millions of Nigerian vehicles from petrol and diesel to cleaner forms of electric vehicles and CNG-powered vehicles through its reverse engineering centre, capable of transforming 15 petrol and diesel cars into CNG vehicles every two hours.
There is also the Vehicle Conversion Incentive which the government, in partnership with the private sector, is offering subsidies and financial incentives to help vehicle owners convert their petrol engines to CNG. This includes financial support for workshops and technicians to facilitate conversions. The government has introduced subsidies and tax incentives for both businesses and individuals involved in the CNG market. This includes duty-free importation of CNG conversion kits and spare parts, as well as reduced taxes for companies that invest in CNG infrastructure.
The government has announced a payment plan to facilitate the conversion to CNG and these payment options allow individuals to convert their vehicles now and pay later with “affordable” monthly instalments at “competitive rates.” The PCNGi which is managing the scheme had in August 2024, introduced an app for switching from petrol to CNG. Using the app, users can find nearby conversion centres, book appointments, and access discounts and updates on fuel prices.
The country’s ambition to transition towards CNG vehicles faces a significant hurdle, one of which is unreliable gas supplies. Experts have raised concerns about the government not addressing this underlying issue, warning that the current inadequate gas supply to the domestic market may thwart the efforts.
The infrastructure gap in the country is one obvious struggle the project is currently facing. Although the number of CNG refuelling stations is growing, they are still few and far between compared to petrol stations. Most parts of the country, especially rural areas, lack access to CNG refuelling infrastructure. This limits the attractiveness of CNG as a nationwide solution
Vehicle compatibility is also a major challenge being faced as there are limited CNG-compatible vehicles. While petrol-powered vehicles can be converted to 100 per cent CNG, diesel engines cannot be converted to run on 100 per cent CNG but conversion can only be 50 per cent diesel and 50 per cent CNG. This limits the project to only cars and some buses, but not trucks and other heavy-duty vehicles.
Added to these challenges are the slow acceptance of CNG by the public and safety concerns. Most car owners are not aware of the initiative and talk more about understanding it. As a result, they could barely see the need to convert either their private cars or their business vehicles to CNG. There is also a general scepticism about the safety of CNG, as many Nigerians are unfamiliar with the technology.
There is a need for a massive public awareness campaign to educate consumers on CNG and the benefits they will derive if they convert their vehicles.
As the conversion to CNG continues to gain momentum, Nigerians are looking to the new industry to generate employment, stimulate local economies, and sustain the environment by reducing pollution.
The journey to adopting CNG as an alternative to petrol is still in its early stages, but the progress made so far signals a promising future. The country’s vast natural gas reserves, coupled with growing government and private sector efforts, provide a strong foundation for a successful.