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Gas Station Shortage Slows CNG Adoption

The insufficient number of Compressed Natural Gas filling stations is threatening the adoption of CNG-powered vehicles. This report examines the challenges facing the Federal Government’s initiative to promote the use of CNG for vehicles in the country

President Bola Tinubu approved the establishment of the Presidential Compressed Natural Gas initiative last year, targeting over 11,500 new CNG-enabled vehicles.

Also included in the target are 55,000 CNG conversion kits for existing PMS-dependent vehicles as the initiative seeks to strengthen in-country manufacturing, local assembly, and expansive job creation in line with the presidential directive.

However, stakeholders in the petroleum and transport sectors have lamented that the absence of the needed CNG stations is frustrating the FG’s initiative and stalling the massive roll-out and use of CNG-powered buses.

Stakeholders raise hope

An insider in the Nigerian Upstream Petroleum Regulatory Commission, who is not authorised to comment on the issue, in a chat, however, said that the government is making efforts to encourage and support the establishment of CNG stations.

She noted that the regulatory framework for CNG was designed to ensure the safety of consumers and promote fair competition.

“We are working closely with stakeholders to monitor the establishment of gas filling stations, adherence to safety standards, and creating an environment where Nigerians can confidently adopt CNG,” the source said.

An energy analyst and CNG expert, Dr Amina Yusuf, told our correspondent that there was a need to establish more CNG buses, adding that CNG offers Nigeria a unique opportunity to address both environmental and economic challenges.

“Its cleaner emissions profile and domestic availability position it as a viable alternative to traditional fuels, reducing carbon footprints while enhancing energy security,” Yusuf remarked.

However, in various cities, especially in Abuja, Lagos and Ogun States, our correspondent gathered that the introduction of CNG had garnered mixed reactions from users. While some individuals and businesses welcome the opportunity to contribute to cleaner air and reduce costs and emissions, others expressed concerns about the accessibility of refilling stations and the overall feasibility of the transition.

Dearth of CNG stations

Drivers, commuters, and major gas marketers confirmed that a major hindrance to the CNG-powered bus initiative was the absence of the needed stations.

They also harped on the urgent need for a robust network of CNG stations to support the adoption of natural gas as a cleaner and more sustainable alternative to conventional fuels for vehicles.

A CNG-powered commercial car driver on the Lagos-Ibadan Expressway, Tanimola Ibrahim, said: “I was initially sceptical about the use of CNG due to the upfront cost of converting my vehicle. However, the fuel savings and the smoother engine performance convinced me of its benefits.

“I hope more CNG filling stations will be established across the country to make it more convenient for drivers like me.”

A business owner and CNG-powered vehicle user, Chidinma Okafor, said she had switched her delivery fleet to using CNG while describing it as a game-changer.

“Not only am I contributing to cleaner air, but the cost savings over time are substantial. The government’s incentives have eased the transition and made it a win-win for both my business and the environment.”

However, Hassan Sani, a commuter differed, saying the CNG refuelling stations were on the increase compared to what it used to be when it came up as an alternative.

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“It is been a cost-effective decision. The availability of refilling stations is increasing, and I’m glad to contribute to reducing pollution. It’s a small change that can make a big difference.”

A CNG-powered taxi driver, Suleiman Abubakar, said, “As a taxi driver, CNG has significantly lowered my operating costs. With the rising fuel price, it is a relief to have a more affordable option. I believe as more drivers make the switch, it will not only benefit us but also contribute to a cleaner environment.”

Abubakar, however, also stressed the need for the establishment of more CNG stations.

A truck driver, Musa Idris, speaking with our correspondent, stressed the need for the Federal Government to increase awareness of the use of CNG-powered vehicles.

He also urged the government to partner with the private sector and gas marketers to increase the number of gas stations across the country.

He said, “The major challenge is the inability to access gas stations when driving long distances. This is a big threat to the use of CNG by truck drivers even though we value it more than diesel.

“Diesel and petrol are now expensive, while CNG is cheaper, safer and more economical,” Idris told The PUNCH.

NNPC, NIPCO partnership

The Nigerian National Petroleum Company Limited recently announced that it had partnered with NIPCO Gas Limited to construct 35 CNG stations across the country. It added that the partnership aimed to provide cheaper alternative fuel to motorists in Nigeria in compliance with President Tinubu’s directive.

“As part of the Nigerian National Petroleum Company Limited’s commitment to providing cheaper alternative fuel to motorists, the company is happy to announce a strategic partnership with NIPCO Gas Limited to deploy compressed natural gas stations across the country.

“This landmark collaboration aims to expand our CNG infrastructure, improve access to CNG, and accelerate the adoption of cheaper and cleaner alternative fuel for buses, cars, and Keke NAPEP, which will significantly reduce the cost of transportation and engender sustainable national economic growth.

“Once fully operational, the stations can service over 200,000 vehicles daily, thereby significantly reducing the cost of automobile fuel for Nigerians and the cost of transportation.”

According to the state-owned energy firm, the first phase, comprising 21 CNG stations, will support intra-city transportation and be ready by the first quarter of 2024.

It disclosed that the second phase, comprising 35 CNG stations, would support inter-city transformation and would be ready by late 2024.

“This will be further complemented by an additional 56 stations to be deployed by NNPC Retail across the country,” NNPC said.

The Chief Corporate Communications Officer, NNPCL, Mr Femi Soneye, when called to share more details on the partnership to establish more CNG stations requested our Correspondent to send him a message, but he had yet to respond to the message as of the time of filing this report.

Assistant General Manager, Corporate Communications, NIPCO Gas, Mr Lawal Taofeek, in an exclusive interview with The PUNCH, however, declared that NIPCO Gas Limited was operating 14 CNG stations across Nigeria and had converted over 7,000 vehicles to run on CNG.

He said, “NIPCO’s technical competency and field experience will bolster the initiative’s success and amplify its positive impact on the nation’s economy”.

President Tinubu said his administration had made provision to invest N100bn between now and March 2024 to acquire 3,000 units of 20-seater buses powered by CNG.

 PMS versus CNG

Petrol that most cars in the country use currently sells for between N568 and N700 per litre, depending on the location of purchase. In some parts of Imo and Anambra States petrol is sold for N670 to N700 per litre, while it costs about N700 per litre in some Northern states.

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The Presidential CNG Initiative said that the cost of CNG, a cheaper alternative to PMS, otherwise known as petrol, was projected to cost N250 per litre.

He said this during a recent interview on the “Energy and You” series packaged by the Nigerian National Petroleum Company Limited, airing weekly via the Nigerian Television Authority Network.

According to Verma, while diesel sells for N850 per litre, CNG for vehicles that use diesel in Abuja is around N219 per scm.

He said: “If we compare the price with diesel or PMS, the price of CNG for the different vehicles is approximately 35 per cent of the current PMS or diesel prices.”

Verma said Nipco Gas had a 14-year experience of operating auto-compressed natural gas in Nigeria, via 14 CNG stations and had converted around 7,000 vehicles to CNG.

He said, “This CNG project will be done at a very fast pace, and it will give relief to Nigerian citizens. As we all know NNPCL is the biggest oil and gas service provider in this country and NNPCL is in every nook and cranny of Nigeria.

“On the other hand, NNPCL has a wide pipeline gas infrastructure which becomes the backbone for the auto CNG stations. The natural gas pipelines will support the installation of CNG stations from where the gas will be taken.

“Also, NNPC Retail has a wide infrastructure network of retailing liquid fuels. With the support of the NNPCL, the gas pipeline infrastructure, and the downstream retail network, the autogas CNG stations will come at a much faster pace to meet the timelines and be more economical, having such infrastructure already in place.”

He said that Nipco had been distributing CNG since 2009, and to Nipco, it was a service to society, not a profit-making business.

According to him, there are other businesses like the supply of gas to industries that compensate for the losses encountered in the CNG business.

While addressing gas availability, Verma said that there was no shortage of gas in Nigeria. However, he admitted that there were constraints in the transportation infrastructure for gas.

He stated further that pipelines were available in the South-south and Southwest regions of the country and the Ajaokuta-Kaduna-Kano pipeline was also progressing and would soon become active.

Recommendation

To enhance the Federal Government’s gas-powered vehicle initiative, stakeholders have recommended expanding the nationwide infrastructure for CNG. They claimed emphasis should be placed on safety standards and fair competition, alongside fostering partnerships with the private sector.

They also urged the government to heighten awareness of CNG benefits and establish refuelling stations in key cities.

Analysts noted that there should be incentives to encourage CNG adoption while supporting local manufacturing and assembly.

The need for the government to be more transparent to build trust among stakeholders was also raised.

Investing in CNG infrastructure will not only promote economic growth but also contribute to environmental sustainability.

Source: Punch

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