Inadequate infrastructure threatens Nigeria’s $10bn CNG, EV targets

…Refilling, charging stations still missing

Nigeria is struggling to meet its ambitious targets of making 30 percent of all vehicles electric by 2025 and growing the Compressed Natural Gas-powered vehicle (CNG) value to over $10 billion in five years.

These ambitious targets are threatened by inadequate support infrastructure including CNG refilling and EV charging stations as the majority of cars on Nigerian roads are still internal combustion engines.

Nigeria’s target if worked towards will enable Africa’s most populous nation to benefit from the global electric vehicle market valued at $384.65 billion in 2022 and projected to grow from $500.48 billion in 2023 to $1,579.10 billion by 2030.

Nigeria’s electric vehicle industry is relatively small, explaining why the government aims for 30 percent of all vehicles on Nigerian roads to be electric by 2025.

In October 2023, President Bola Tinubu launched the Presidential CNG Initiative to deliver cheaper means of transportation after the removal of the petrol subsidy increased petrol pump prices, hiked the cost of transportation, and started pilling pressure on Nigerians.

According to Michael Oluwagbemi, chief executive of the Presidential Compressed Natural Gas Initiative, Nigeria’s CNG market would exceed $10 billion in five years (2029).

The Federal Government has earmarked N100 billion from the N500 billion palliative budget to purchase 5,500 CNG buses and tricycles, 100 electric buses, and over 20,000 CNG conversion kits.
The government said there are plans to build CNG refilling and electric vehicle charging stations nationwide to actualise the plan.
BusinessDay findings show that several Nigerian auto assemblers including R.T. Briscoe, Jet Motors, Innoson Vehicle Manufacturing Company, and Toyota Nigeria have set up CNG conversion plants to tap from its inherent opportunities.

Read also: Nigeria’s energy transition: EVs, CNG vehicles and transportation emission reduction goals

The idea is to enable interested vehicle owners to convert from internal combustion engines to CNG or LPG as originally most cars are made with internal combustion engines.

Seyi Onajide, group managing director of RT Briscoe Nigeria Plc, expressed concern that insufficient CNG or LPG refilling stations in Nigeria will delay the Federal Government’s CNG initiative.

“If you’re asked to bring your vehicle for conversion from internal combustion engine to CNG because it is cost savings, the next question you will ask is, where will I get the gas? The non-availability of CNG refilling stations is still a big challenge.

“Until the gas refilling stations are readily available in the country, the use of CNG-powered vehicles will only be limited to big organisations and corporate bodies that are fleet owners and can house their refilling station and store their gas,” Onajide explained.

According to him, such corporate bodies and big firms that have fleets of vehicles can recoup their investment in building refilling plants or charging systems for EVs on their premises.

“We believe that average vehicle owner in Nigeria and commuters can benefit from using CNG cars because it has a lot of benefits including cost savings and cutting down transportation cost,” he said.

Pointing out that only about three CNG refilling stations exist in Lagos, he said the government is working to ensure that CNG refilling stations are established across the country.

Also, Bart Nnaji, chairman of Geometric Power Group, said in a recent forum in Lagos that recharging infrastructure must be built for Nigeria to benefit from the global EV rush.

Expressing worry that poor power supply in the country can thwart Nigeria’s plan to gain from the global EV rush, Nnaji said that electric power will need to be available at the recharging stations for people to charge.

He said inadequate gas for power and industrial processes will afflict the nation’s CNG initiative because CNG solution requires that gas must be available to be compressed into CNG.

“We must recognise that moving towards the use of electric vehicles will require significant improvements in electric power availability as well as the recharging station’s infrastructure,” Nnaji said.

Findings show that it is more cost-effective to use CNG-powered vehicles compared to internal combustion engines. CNG engines consume less gas, making it cheaper to run vehicles on compressed gas.

However, as inadequate support infrastructure poses a threat to the actualisation of government initiatives, experts believe that Nigeria can benefit from the use of hybrid vehicles that use both an internal combustion engine and an electric motor for propulsion.

Pointing out that Nigeria cannot go on full CNG at present, Onajide said the introduction of hybrid vehicles is necessary pending when support infrastructure for CNG and EVs are made available nationwide.