The cost of converting petrol and diesel cars into Compressed Natural Gas (CNG) engines and the limited number of refilling stations are key issues de-laying greater use of gas-powered vehicles on Nigerian roads.
CNG is fast becoming the preferred fuel for heavy equipment such as fleets of trucks with companies in Nigeria al-ready taking advantage. It costs between N100, 000 and N300, 000 to purchase the kit needed in converting 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.
“These conversion kits are imported and should the government work out favourable terms and conditions such as free im-port duties and tax incentives, the cost per kit will fall and more car owners will participate, there is demand, no doubt,” Abiodun Lawal, spokesperson of NIPCO told BusinessDay on phone.
There are over 4.5 million cars in Nigeria. Ensuring that a percentage of these cars are environmentally friendly is an urgent need in Nigeria. This means converting them into Natural Gas Vehicles (NGV), a campaign Egypt has taken head-on and is making progress, is a necessity.
In 2019, NIPCO Gas Limited, a downstream oil and gas company started a pilot project in Edo State of converting sport utility vehicles (SUVs), taxis and buses from petrol to CNG engines and have successfully done so for over 5, 000 cars.
When this project got under-way, the Nigerian National Petroleum Company partnered with NIPCO to supply the gas, which led to the formation of Green Gas Limited, a company that has reportedly ceased to exist.
NGVs maintenance costs are lower because CNG is a cleaner-burning fuel and generates less wear-and-tear on some engine components. CNG is eco-friend-lier than petrol. Natural gas produces far fewer harmful emissions and hydrocarbons than petrol. Unlike petrol CNG minimises harmful carbon deposits when combusted, Ayodele Oni, energy partner at Lagos-based Bloomfield Law Practice has argued.
The numbers look good too. As of April 2019, the landing cost of Premium Motor Spirit (PMS), also known as petrol was N35 higher than the pump price of N145 per litre, Ibe Kachikwu, the former minister of State for Petroleum Resources had said. But without subsidies, CNG per cubic metre costs between N100 and N110 per standard cubic meter (the equivalent of a litre), Sumeet Singh, director – Sales & Strategy at Power gas Nigeria told BusinessDay. He also pointed out that their fleet of trucks runs on CNG.
Zainab Ahmed, the minister of Finance, Budget and National Planning, in the build-up to the preparation of 2020 Appropriation Bill had stated that N450 billion was voted for subsidy on PMS. But the CNG may not need subsidies to save Nigeria billions of Naira as cars run on a cleaner and healthier fuel.
NIPCO has seven refilling stations for CNG in Edo State and Power gas Nigeria has also em-barked a sustained effort to build stations across Nigeria starting from the South Western states. “We expect the government to allow market forces to determine the price of CNG,” Singh said.
Today a CNG plant can be built in every petrol station and cars can do the same journey which one litre of petrol can do at N110 per cubic metre of CNG but N145 per litre of subsidised petrol.
