President Muhammadu Buhari, in his capacity as the both the head of the country and minister for petroleum resources, pledged to revitalise the oil and gas industry and also deepen the use of gas across the country.
In line with this, numerous projects and policies were formulated such as the ‘Decade of Gas’, which captures the National Gas Policy as well as the National Gas Expansion Program (NGEP), which the autogas project falls under.
Launched in December 2020, the autogas project had plans to reduce the country’s high reliance on petrol and promote the use of gas as a cleaner and cheaper energy source for vehicles.
At the takeoff stage, the federal government planned to convert up to one million vehicles – mostly passenger and haulage vehicles that run on Nigerian roads – by the end of 2021 as pilot, but that has not been achieved. BusinessDay findings reveal that 29 months later, what has been achieved is nowhere near the set target.
Speaking at the sixth Nigeria International Energy Summit in Abuja, Gabriel Aduda, permanent secretary, ministry of petroleum resources, when asked for an update, simply said that over 1,000 vehicles had been converted, most of which are government-owned.
But many worry why this particular project, which was aimed at helping drive the utilisation of the country’s enormous gas reserve, would fall short of expectations.
Ayodele Oni, partner, energy practice group at Bloomfield Law Practice, said that the projects commenced with very good intentions and is a brilliant idea that could have revolutionise usage of Nigeria’s abundant gas resources, but was challenged with its implementation which has to a large extent disincentivised the project.
“The project has not been able to deliver on its set targets so far for varying reasons such as lack of decisive implementation, inadequate infrastructure (gas development infrastructure and vehicle-capacity infrastructure), lack of sufficient investment in Nigeria’s petroleum sector, inadequate funding and tough economic realities, increasing cost of gas, amongst others,” he told Businessday.
The government initially assured it would bear the conversion cost estimated between N200,000 and N250,000 per vehicle, but backtracked, leaving interested car owners to bear the cost. BusinessDay had earlier reported that Nigeria has between 20,000 and 50,000 Natural Gas Vehicles (NGVs).
In an exclusive interview with BusinessDay early last year, Timipre Sylva, the then minister of state for petroleum resources, had acknowledged how the CNG project would even help the government cut down huge fuel subsidies since many vehicles were anticipated to begin to run on gas and consequently reduce transportation costs.
He, however, noted that the project required a lot of investment outlay, but that the good thing was that the government had been able to get international companies who were willing to come half way with us.
He said: “We were able to get companies from some countries that we have been talking to and they have agreed to meet us 50 percent of the way. And of course, we will provide 50 percent, that process has started.
“We already have a N250 billion gas fund with the central bank, all that will start going out within the next one or two months. And once that start going into the hands of investors, you will see all the investments and the conversion and of course things will start moving.
“These are some of the things we want to put in place and I can tell you that we have not just been sleeping but working. I hope that in another 2 months, a lot of things will start happening.”
Owing to government’s promises, some filling stations had gone ahead to install dispensers for NGV such as NIPCO Plc which states on its website that it has established 15 CNG running stations in Benin and has converted over 5,600 vehicles around Benin City.
“Presently NIPCO Gas owns about 67 CNG cascades to ease CNG supply and distribution to industries in Ibafon axis; The Ibafon CNG station along with a city gas station has a larger compressing facility (12,000 scmt) for loading CNG to the nearby industries,” it stated.
But a technician at the NNPC retail station, Lugbe, in Abuja, said that people have not been coming to request for the conversion service, and that there has been an abysmally low patronage of Compressed Natural Gas.
With Nigeria as a resource rich country, the project was predicated on the country’s proven gas reserve base of 208.62 trillion standard cubic feet as at January 1, 2022 according to data obtained from the Nigerian Upstream Petroleum Regulatory Commission.
Data from WorldoMeter, a platform that provides real time statistics, Nigeria ranks number 9 globally in terms of gas reserves, yet ranks 12th in terms of natural gas production and 38th in gas consumption.
With the project largely unfulfilled, experts say that motorists will still have to rely on PMS for a longer time while the diversified utilization of gas drags.