How Nigeria can accelerate the uptake of CNG powered vehicles

In Could, the newly appointed president, Bola Ahmed Tinubu, determined to eradicate gas subsidy that had historically maintained reasonably priced gas costs for Nigerians. Since then, gas costs have skyrocketed, with Nigerians at the moment paying over N600 for a litre of petrol, a big improve from the earlier N185 official pump worth earlier than the subsidy elimination.

The sudden surge within the worth of petrol, an important power supply in Nigeria, set off a right away chain response that impacted people and companies. Market costs for items soared, and transportation prices grew to become unaffordable, forcing residents to pay twice as a lot as that they had been paying earlier than.

As the general operational prices related to gas purchases rise, Nigerians discover themselves compelled to discover options to deal with the costly gas costs. From embracing photo voltaic power to utilising gasoline, residents are looking for more cost effective choices. We beforehand explored how the elimination of the gas subsidy has fuelled the transition to gas-powered turbines in Nigeria. Curiously, equal consideration is being drawn to gas-powered automobiles. 

President Tinubu lately introduced an funding of N100 billion between July 2023 and March 2024 to amass 3000 items of 20-seater CNG-fuelled buses has been made. Nonetheless, past governmental procurement, a pattern of non-public acquisition of gas-powered automobiles and the conversion of present fuel-based automobiles to gasoline amongst Nigerians has emerged.

These automobiles are economically advantageous and boast a cleaner environmental power footprint in comparison with their petrol-powered counterparts. Though nonetheless nascent, there exists vital potential for the next adoption price. First, Nigeria has substantial gasoline reserves, rating the ninth largest globally with roughly 209.5 trillion cubic ft (tcf) of verified gasoline reserves. The federal authorities asserts that Nigeria presently contributes to 33 per cent of the full gasoline reserves throughout the African continent. Secondly, the inhabitants is instantly open to embracing various power sources past costly conventional fuels.

It has been reported that transitioning from petrol to Compressed Pure Fuel (CNG) has the potential to save lots of Nigeria as much as N3 trillion yearly. However this depends closely on widespread industrial adoption. To attain this aim, the federal government should take vital strides to encourage the acceptance of gas-powered automobiles. And one pivotal technique includes the institution of strong CNG station initiatives and obligatory infrastructure.

To start with, not like our conventional petrol stations, CNG filling stations are important infrastructure for a profitable transition to CNG-powered automobiles as they supply the mandatory gas provide for automobiles to function successfully. However in Nigeria, CNG stations should not prevalent and are comparatively scarce within the nation. And this may occasionally make it tough for Nigerians to entry handy refuelling choices for his or her automobiles. 

As an example, the Managing Director of  Nigerian Bottling Firm Ltd (NBC) Matthieu Seguin, on this report disclosed that the unavailability of CNG filling stations throughout the nation was affecting the seamless transition of a few of its vehicles from diesel-powered to CNG. He famous that amongst their fleet of 10 CNG vehicles the corporate has, one grew to become stranded after shifting past the designated space as a result of absence of accessible refuelling stations for a refill. In accordance with him, there are ten CNG vehicles underneath NBC’s pilot scheme however plans are underway to extend the quantity as quickly as extra CNG filling stations come on board.

We have now seen a comparable problem within the adoption of electrical automobiles (EVs), the place the shortage of charging stations within the nation has been evident. Encounters like these can discourage residents from embracing renewable power choices, be it EVs or gas-powered automobiles. 

Commendably, the federal government is charting a path of improvement on this path. The Nigerian Nationwide Petroleum Firm (NNPC) Restricted lately partnered with NIPCO to assemble 35 CNG stations throughout the nation to help intra-city and inter-city transportation by the top of 2024. This shall be additional complemented by an extra 56 stations to be deployed by NNPC Retail throughout the nation. Upon changing into totally operational, these stations are poised to cater to the refuelling wants of greater than 200,000 automobiles day by day.

These aspirations are lofty but attainable. However, historical past has proven that projected supply dates for initiatives or infrastructure in Nigeria should not all the time met. This example raises issues, because it may impede the swift enlargement of CNG adoption.

In an identical vein, the existence of important infrastructure corresponding to environment friendly gasoline transportation pipelines stays essential. The seamless distribution of gasoline to totally different places together with states, storage terminals, or depressurization factors, all in service of CNG stations, is notably facilitated by the presence of pipeline infrastructure. For instance, the northern area of Nigeria, going through a scarcity of gasoline provide, would revenue from initiatives just like the Ajaokuta–Kaduna–Kano Pure Fuel Pipeline, which regrettably stays pending. 

Furthermore, the introduction of free import duties and tax incentives can catalyze expediting using Compressed Pure Fuel (CNG) in Nigeria. At the moment, the conversion kits important for CNG-powered automobiles are introduced into the nation by imports as a result of absence of native manufacturing. Predictably, this situation culminates in a expensive import course of, exacerbated by the Naira’s risky change price in opposition to the Greenback, and additional amplified by the imposition of import duties and taxes.

Enacting a coverage aimed toward lowering or eliminating these bills would considerably alleviate the monetary pressure on people and enterprises looking for to undertake CNG know-how. These initiatives would end in a lower within the general value of conversion kits, making CNG know-how extra interesting and accessible. 

Equally, a notable discount in taxes, particularly concerning the importation of CNG-powered automobiles, is crucial. This transfer goes past merely stimulating demand for CNG automobiles, such tax reductions would function a compelling incentive for producers to channel investments into the manufacturing and importation of a extra vital variety of CNG-powered automobiles. Collectively, these methods possess the potential to expedite a shift in direction of cleaner power options inside the realm of transportation.