Nigeria’s natural gas vehicle age nears as petrol stations upgrade facilities

Nigeria’s Department of Petroleum Resources (DPR) has audited petroleum products retail outlets across the country to ensure they are ready for the Federal Government’s promise to provide Nigerians with alternative, cheaper, cleaner, and more reliable sources of energy for automobiles.

Timipre Sylva, minister of state for Petroleum Resources, repeated this on Friday. This is in line with the government’s determination to drive autogas use and penetration under the National Gas Expansion Programme (NGEP).  In a previous press statement, Sylva had put the end of September for roll-out of the ambitious autogas programme.

In this vein, the DPR is directing 9,000 retail outlets across the country to immediately start the upgrade of their facilities to allow them dispense gas to vehicles for transportation.

This was after the DPR carried out a nationwide audit of all retail outlets in Nigeria and classed them into categories one, two and three, with a view to ascertaining their readiness for the deployment of Add-On facilities for gas products.

Nine thousand retail outlets have made it to the category one list, representing 27 percent of the total number of retail outlets in Nigeria. This means they are suitable for immediate integration of Add-On facilities based on safety and technical assessments. All Category 1 Retail Outlet Operators have been directed to start the immediate installation of modular Add-On facilities or full-scale stand-alone plants, and also update their DPR operating licences.

Operators of retail outlets in Categories 2 and 3, whose facilities do not meet the minimum requirements or do not have sufficient land area, are encouraged to apply for stand-alone liquefied petroleum gas (LPG), compressed natural gas (CNG), and liquefied natural gas (LNG) or Auto Gas facilities (full-scale or modular) under an incentivised regulatory regime.

The DPR has also approved the deployment of skid-mounted modularised or containerised LPG/Autogas handling systems and other intrinsically safe systems for gas storage and handling to promote affordability, accessibility, and availability of the products.

What these recent moves on the part of government imply is that gears have shifted and the FG is moving into action mode. The automobile gas development as a component of the NGEP appears to have reached an advanced stage, aligning with the Petroleum Ministry’s push for the development of domestic liquefied petroleum gas (LPG), compressed natural gas (CNG) and liquefied natural gas (LNG).

In an exclusive interview with BusinessDay earlier in the year, Sarki Auwalu, director of DPR, said Nigerians require energy freedom, beyond subsidy removal. This means providing alternative energy sources for Nigerians and natural gas (in its various forms) is cheaper, cleaner and more reliable.

“We want to introduce CNG. Cars will be converted, especially commercial ones, to become CNG-enabled. One litre equivalent of CNG will give you at least 180 percent more mileage when compared to one litre of petrol and it is cheap,” Auwalu told BusinessDay in February.

“Nigerians buy petrol at any price because they do not have alternatives,” he said.

As of 2013, it was estimated that 3,000 vehicles had been converted to run on compressed natural gas and petrol in Benin City, capital of Nigeria’s Edo State. In 2018, NIPCO Plc claimed it has converted a total of 5,600 vehicles in Nigeria to use CNG. The conversion of the vehicles was done at the company’s workshops in Benin City and Ibafo, Ogun State. This is set to open up opportunities with the renewed resolve from the Federal Government.

“We are confident that retail outlet operators and other investors will leverage on these opportunities in the domestic gas sector to grow their wealth and create employment for Nigerians,” Auwalu said.

However, conversion costs remain prohibitive. It costs between N100,000 and N300,000 to purchase the kit needed to convert a car from petrol or diesel engine to a CNG engine, depending on the nature and condition of the car. But the conversion leads to a 40 percent savings in energy cost for car owners.