By Adaobi Rhema Oguejiofor
Upon the President’s announcement that the petrol subsidy would be removed at the inception of his administration in 2023, many challenges sprang up to counter the otherwise well-meaning policy. Among the major hitches in the system was an escalation in the cost of transportation due to the hike in petrol pump prices, which had a great impact on other sectors of the economy.
To mitigate the negative impacts on ordinary Nigerians’ lives and ensure a just transition for all, the presidency unveiled several measures, including the introduction of an alternative fuel, Compressed Natural Gas (CNG). The government launched an initiative to open CNG conversion centres nationwide for motorists to convert their petrol-driven vehicles to gas-powered automobiles.
As part of the implementation of the programme, the government introduced a portal to allow users to convert their petrol-powered vehicles to CNG with an option to pay-later for the conversion costs.
In alignment with this, the Presidential Compressed Natural Gas Initiative (PCNGI) has announced that more than $200 million has been invested in the Compressed Natural Gas (CNG) value chain so far.
The Project Director and Chief Executive Officer (CEO) of PCNGI, Michael Oluwagbemi, noted that the initiative has been able to successfully convert over 100,000 vehicles from petrol to CNG from the inception of the initiative till now.
In a statement, Oluwagbemi highlighted the establishment of about 140 conversion centres across the country, noting that also among the program’s achievements, thousands of new jobs and economic opportunities are opening up along the line.
In his own words, “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.”
The PCNGI Boss also responded to what he regarded as a “toxic debate” against the initiative in the media, emphasizing the importance of CNG in Nigeria’s energy security and the financial savings it could bring. He explained that the shift from petrol to CNG could save the nation approximately $3 billion annually while still contributing an additional $2 billion in revenue over the next three to four years unlike the $10 billion annually spent on petrol subsidy.
According to Oluwagbemi, the initiative has also grown with the number of conversion centres in the country, rising from just seven in 2023 to more than 140 nationwide. He added that over 2,000 Nigerians have already been employed across these centres, and with further expansion, more job opportunities are expected.
Rather than a challenge, the PCNGI Boss said the initiative is an opportunity and the body is deepening the development of CNG infrastructure with its partners.
Speaking on CNG being a much cleaner energy option, Oluwagbemi emphasized that it is also an economically viable and safer alternative. He said that it is lighter and eight times less explosive than diesel and eighteen times less explosive than petrol, adding that it is also more readily available and a more sustainable alternative for Nigeria’s energy security.
PCNGI also highlighted that with one million vehicles running on CNG, the overall demand would be just 2.75 per cent of Nigeria’s current daily gas production, which is a significant but manageable figure.
Oluwagbemi further provided insights into the investments being made to expand the CNG infrastructure, noting that over $175 million has been spent on mother station investments alone, with 65 new licenses issued. He explained that CNG distribution is also picking up with 75 new daughter stations under construction across the country, and additional containerized and mobile refuelling units are being set up by the private sector working closely with regulators.
Meanwhile, a recent development revealed that the Nigerian National Petroleum Company (NNPC) Limited announced plans to establish about 12 CNG mother stations and mini-Liquefied Natural Gas (LNG) plants across the country.
The announcement was made by Mele Kyari, at the opening of the 42nd Nigeria Association of Petroleum Explorationists (NAPE) Annual International Conference and Exhibition in Lagos.
Kyari emphasized that NNPC is committed to tackling the energy trilemma currently facing Nigeria, thereby balancing energy security, sustainable growth, and affordability. He described the projects as a cornerstone of NNPC’s vision for Nigeria’s energy future, highlighting that the upcoming CNG and LNG initiatives are expected to boost the existing 1.6 billion standard cubic feet (bscf) of gas currently supplied to the domestic market.
While underscoring NNPC’s determination to strengthen the country’s gas infrastructure and supply chain, Kyari stated that the energy trilemma is a profound responsibility the Company shoulders as stewards of Nigeria’s energy future. He further noted that NNPC is working on expanding critical gas infrastructure, including the Ajaokuta-Kaduna-Kano (AKK) Gas Pipeline and the Obiafu-Obrikom-Oben (OB3) Gas Pipeline.
According to him, the Company is also exploring innovative partnerships with private refineries and implementing “Naira-for-crude” transactions. These measures are designed to stabilise the Naira, reduce Nigeria’s dependence on foreign exchange, and promote an affordable supply of petroleum products.
The GCEO expressed that CNG and mini-LNG stations will contribute to these goals by providing an alternative energy source, potentially easing the nation’s reliance on imported fuels. He added that the upcoming project rollouts, expected within the next three to six months, are part of NNPC’s ongoing efforts to expand its energy offerings and make cleaner fuel options available to Nigerians.
Kyari called for collaboration across the industry to achieve these ambitious energy goals, dismissing allegations that the Company is hindering the operations of domestic refineries. He stressed that the NNPC’s partial ownership of the Dangote Refinery is, in fact, a strategic move aimed at boosting domestic fuel supplies.
