With renewed vigour by the National Automotive Design and Development Council (NADDC) to address the infrastructure gap hindering the widespread use of Compressed Natural Gas (CNG) among Nigerians, economic analysts strongly agree that this portends more positives than negatives
There is no doubt that there is a huge deficit in the supply of infrastructure to drive the use of the Compressed Natural Gas (CNG), which is why those saddled with the amplification of this novel idea and ideal are not taking things lying low.
Speaking at a press briefing in Abuja last Friday, Mr Joseph Osanipin, the Director-General of the National Automotive Design and Development Council (NADDC), while admitting that Nigeria does not have adequate infrastructure to meet the demand and push for CNG, however, assured that significant investments were being made to bridge the gap.
“The infrastructure we have currently cannot fully support the demand for CNG. However, the Federal Government is working seriously on that. On Sept. 30, the government released N122 billion to assist investors and stakeholders across Nigeria’s geopolitical zones to provide the necessary infrastructure for CNG.
“A lot of investments are going into the provision of infrastructure to support gas. Once these projects are completed, we will begin to see the results in the near future. Companies like NIPCO, which have been in the gas business for years, have a head start, but many other stations are also building CNG facilities,” he said.
He explained that building infrastructure, like constructing the foundation of a house, often goes unnoticed until tangible results are visible. He cited examples of the cost-effectiveness of CNG, highlighting its potential to reduce operational expenses for businesses significantly.
“For instance, a trip that costs N550,000 with diesel can be done for N90,000 with CNG. This gives users a savings margin of N460,000 per trip. Such savings can translate into lower product costs, which benefit both businesses and consumers.
“Partnerships are being formed, and infrastructure projects are underway to ensure the availability of gas. The infrastructure will come, and when it does, the challenges with gas supply will be significantly reduced,” he said.
It may be recalled that the federal government is actively promoting the adoption of CNG through the Presidential initiative for CNG (Pi-CNG).
Investigation by The Nation revealed that the Nigerian Customs Service (NCS) has removed import tariffs on CNG equipment as well as cooking gas (Liquefied Petroleum Gas).
The Pi-CNG has invested over $200 million in the spread of CNG and has converted over 100,000 petrol vehicles to CNG. Infrastructure deficit is one of the hindrances against the spread of CNG.
NADDC mission to power CNG
In a related development, the NADDC had announced plans to establish the necessary structures and frameworks to begin local production of vehicle spare parts.
This initiative is aimed at reducing Nigeria’s reliance on imports, which currently cost the country $1 billion annually.
Speaking on behalf of the NADDC boss, the Director of Research Design and Development, Fidelis Achiv, who disclosed this during the conclusion of a two-week automotive engineering and software design training held in Abuja organised in partnership with Midas IT Co. of South Korea, focusing on Midas NFX software, a platform for advanced design and analysis.
Achiv noted that the council is committed to transforming Nigeria’s automotive industry by increasing the percentage of locally manufactured components in vehicle assembly.
“We are working to achieve a level whereby we can go back to assembling vehicles that have up to 40% locally manufactured components. We have vehicle assemblies in Nigeria but the assembling that is going on is not adding much value to the economy.
“Vehicles that have been assembled come in completely built, and they just remove the tyres, remove the exhaust system, remove the engine, ship them, and come and assemble them here. But we want to transform from that to a level where these vehicles come in unpainted, the welding is done here, some components parts are produced here and the assembly will add more value, and employ more people. We have over 11 million vehicles on our Nigerian roads.
“Of the over 3,000 parts in a vehicle, if we can leverage on producing just 10 that we can beat our chest, that in the whole world, Nigeria produces these 10 components and they are best, the market is going to be huge. Our economy will change,” he stated.
The training boot camp, which hosted 15 participants, aims to equip engineers with the skills necessary to achieve this vision.
“The essence is to train engineers to design and produce parts, making Nigeria self-sufficient in vehicle parts production,” Achiv explained.
Fostering innovation
Abdul-Lawal Zubair, Managing Director of FAZSAL Nigeria Limited, encouraged participants to apply their newly acquired skills practically and creatively to address challenges in the automotive industry
“You have not just seen the theory of design but with practicality. Solve the issues for us. There is a reason among all the software for this agency to choose Midas NFX.
“Let them be proud of you. They can call you for advanced training, possibly in South Korea. Don’t just know the software and keep it. Be innovative and give solutions,” he said.
One of the participants, Lukman, expressed gratitude for the opportunity and the exposure to the advanced Midas NFX software.
“This training has widened my level of thinking and reasoning. The software is outstanding for modelling and analysis. We are now more equipped to be creative and contribute to producing what we consume. This software offers a platform for optimizing design and introducing innovative ideas into the market,” he stated.
Making case for CNG
Interestingly, key players in the transport, environmental and oil and gas sectors have identified the Compressed Natural Gas (CNG) initiative of President Bola Tinubu as one of the major drivers of industrialisation.
Speaking at the sensitisation programme on CNG infrastructural development at the Onne, Oil and Gas Free Zones, the Minister of Industry, Trade and Investment, Dr. Jumoke Oduwole, said the initiative remained one of the bold reforms of the President.
The sensitisation tag, driving sustainable transportation: accelerating CNG adoption, was organised by the Portland Gas in collaboration with the Oil and Gas Free Zone Authority.
While addressing the stakeholders, Oduwole said CNG offered a cleaner, cheaper and more sustainable solution for powering vehicles, particularly in the transportation and logistics sectors that underpinned industrial activities.
Oduwole, who was represented by a Director in the Ministry, Theresa Ogolo, said the event marked a significant milestone in the nation’s collective effort to drive sustainable transportation and transition to cleaner and more efficient energy systems.
“The adoption of CNG as a viable alternative fuel aligns with the Federal Government’s broader energy transition strategy, she said, adding that “this strategy seeks to diversify our energy mix, reduce carbon emissions, and harness the economic potential of Nigeria’s abundant natural gas reserves.
“Our presence here today, at Onne Oil and Gas Free Zone is deliberate and strategic. As a hub for innovation, investment, and industrial activity, Onne is ideally positioned to serve as a launching pad for this initiative.”
She said the government through the Ministry of Industry, Trade and Investment, was fully committed to fostering partnerships with stakeholders across the public and private sectors.
“As witnessed today, the strategic collaboration between Oil and Gas Free Zones Authority and Portland Gas limited, on CNG Adoption and development project is an initiative to promote the use of CNG as an alternative cleaner and cheaper energy source tailored towards contributing to the current administration’s transformative agenda”, she said.
She said to achieve the transformative initiative, emphasis must be placed on engaging stakeholders to a robust and strategic sensitization and capacity building on CNG adoption.
She said transport operators, industrial players and end-users must be educated about the economic and environmental benefits of adopting CNG adding that public awareness, policy alignment and coordinated implementation would ensure seamless and inclusive transition.
She promised that the Federal Government would continue to provide enabling policies, regulatory support and investment incentives to accelerate CNG adoption.
The Programme Director/Chief Executive, Pi-CNG, Michael Oluwahbemi appraised the impact of the initiative on the economy describing gas as the fuel for industrialization.
“Today we are changing the tide through President Bola Ahmed Tinubu”, he said, adding that the initiative had so far attracted $459m.
He said prior to the initiative, there were only seven conversion centers in five states but that the number increased to 153 centres across 23 states.
The Managing Director, Portland Gas Limited, Folajimi Mohammed, commended President Tinubu for driving the initiative adding that the federal government had demonstrated willingness to subsidise the cost
He said: “In terms of subsidising the cost, the federal government has identified a few people who they have given the free kits to already, so they will make sure the conversions are free of charge.
“We know that the CNG conversion is pretty expensive but through the Ministry of Finance Incorporated under the Credit Course Scheme, there is a fund called CALM which is for automatic conversion, light and for solar systems.”
Henceforth, he said the Onne Oil and Gas zone would operate the conversation centre to accelerate CNG adoption for trucks and cars within the zone.
He said: “The drive for conversion to CNG has been very aggressive by the present administration. The drive has been spreading very fast. As at today, we are not having issues of conversation but refilling, which we believe that the adoption has been very high.”
On private sector partnership, he said: “Very soon the private stakeholders are tackling the issue of refiling and is going on very well. Basically, if you qualify for that scheme they will give you the funds, almost like a form of a loan, over the time you will pay back.”
He asked the people not to be skeptical about CNG saying that the initiative had come to stay.
Already, he said Portland opened about seven stations across Lagos, Abuja and currently in Onne to accelerate the process.
In his welcome address, the Managing Director/CEO of Oil and Gas Free Zone Authority (OGFZA), Bamanga Jada, commended Tinubu for his bold and crucial reforms into various sectors of the economy.
Jada said: “One of His Excellency’s many reform policies is the Presidential CNG Initiative, an innovative and far-sighted programme introduced by Mr. President as a component of his palliative intervention to provide cheaper and cleaner fueling alternatives that will significantly lower the energy cost in the country.”
He said the free zone authority remained committed to driving and facilitating investments that aligned with Mr. President’s objectives for industrial growth and economic diversification.
He said: “In this regard, we have specifically designated two of our Free Zones at Liberty Oil and Gas Free Zone, Akwa Ibom State, and the Orashi Energy Free Zone in Imo State for gas and green energy projects, with special focus on gas processing and renewable energy resource development projects.
“In the last 17 months under the Tinubu-led Administration, OGFZA’s Liberty OGFZ has attracted FDI worth over USD$1bn.
“More importantly, today’s event reflects the growing confidence that President Bola Ahmed Tinubu’s Reform Agenda is receiving from both domestic & foreign investors alike, and showcases the diligent role that our Honourable Minister is playing in advancing Mr. President’s mandates, especially in promoting the adoption of Compressed Natural Gas (CNG) as a cleaner, efficient and more environmentally friendly energy source”.
He said Nigeria is acknowledged as Africa’s largest natural gas producer, with over 209 trillion cubic feet (TCF) of proven natural reserves.
“In recent years, the global energy landscape has undergone tremendous change. Faced with the dual challenges of increasing energy demand and urgent environmental concerns, we must seek solutions that are both efficient and sustainable.
“CNG stands at the forefront of this endeavor. It is a cleaner, more efficient alternative to conventional fossil fuels, and today, we take a significant step toward embracing its potential.”
Drive for electric vehicles
Instructively, the global move towards electric vehicles (EVs) for emission reduction and economic advantages is growing. Mr. Sam Faleye, CEO of SAGLEV, a U.S. EV company, talks about the potential for EVs in Nigeria post-fuel subsidy removal, emphasising job creation and environmental benefits.
He underscores that power availability isn’t a major issue for EVs, thanks to their ample range. SAGLEV’s success in Ghana validates EV feasibility in West Africa, with regional expansion ahead.
Faleye highlights the affordability of EVs, citing lower maintenance and fuel costs. Collaborations with banks aim to enhance accessibility.
All over the world, the shift to electronic vehicles is gaining traction as efforts to reduce emissions hit the top gear.
Beyond the climate change actions, stakeholders are also pointing out the numerous economic benefits of embracing EVs.
While the campaign is already getting to Nigeria with a few affluent Nigerians buying Tesla EVs, there are still concerns that the revolution may not gain ground in Nigeria because of the country’s perennial power challenge.
Mr. Sam Faleye, the Chairman and Chief Executive Officer of SAGLEV Inc., a Delaware, U.S.A. Incorporated Electric Vehicle Company, delves into the economics of EVs in Nigeria and argues that it is now the most economical option for Nigerians with the removal of fuel subsidy.
