Nigeria has a huge gas reserve which it is not using. Rather than flare the gas, experts say it can be used for vehicular mobility. Welcome to the age of Compressed Natural Gas (CNG), writes ADEYINKA ADERIBIGBE
It is becoming fashionable to see vehicles bearing CNG stickers in the nation’s metropolis. This is more pronounced in Benin City, the Edo State capital, and Lagos, where the nation’s flagship gas downstream retail outlet NIPCO Plc has presence.
CNG is accronym for the Compressed Natural Gas, and it means those vehicles have been converted to use gas as fuel.
It also means that gradually, Nigeria is joining the list of developing nations using their gas reserve for fuel. As at the last count, the world has over 23 million such vehicles in 86 countries. Of these, Nigeria, despite its huge gas reserve estimated at trillions of cubic metres, has about 5,000 vehicles with converted engines. This means the government is lax in fashioning policies that could promote this new, cleaner fuel option via the adoption of policies encouraging importation and vehicle assembly plants now dotting the country.
While successive governments battle subsidising the huge cash differentials in fuel import, the gas sub-sector with its huge potential to power a cleaner, safer and more environmental friendly economy hibernates.
But this wasn’t supposed to be so. Since it was licenced in 2009 by the Obasanjo administration to pioneer gas downstream retailing, the Nigerian Independent Petroleum Company (NIPCO) Plc, an association of local major oil marketers, has continued to strategise on getting Nigerians to embrace CNG’s use for vehicle fuel.
Between Benin, where it began its pilot scheme and Lagos, NIPCO has raised 5000 new users of the cleaner fuel, with 4,500 users operating within the Benin axis alone.
Though NIPCO would boast that CNG, which remains its core focus has come to stay in Nigeria, as it aims at not only providing alternative fuel to petrol and diesel, its targeted is hazardous carbon emissions that have negatively impacted on the environment.
In the last eight years, NIPCO has pioneered the innovation of powering vehicles by gas.
Nigeria is joining other developing nations, such as Iran, China, Argentina, Pakistan, Brazil, India and Bangladesh in powering vehicles with a cleaner energy source in which they were hugely blessed. The difference is that while Nigerians continue to prevaricate, other countries continue to break new grounds, with Iran (4.1 million), China (3.9 million), Pakistan 3.7 million), Brazil (1.9 million), India (1.8 million) and Bangladesh (0.2 million) vehicles.
With its abundant resource, Nigeria has enormous potential to grow more CNG vehicles even as NIPCO said it has 10 CNG refuelling stations nationwide.
In Lagos for instance, NIPCO world- class filling station at Ibafo, Ogun State, along the Lagos-Ibadan Expressway, has continued to witness impressive patronage of commercial local and intercity buses, light and heavy duty trucks and private vehicle owners.
Some factors, chief among which is the cost profile sources, said may however, impede widespread of CNG.
Findings at NIPCO showed that conversion of petrol or diesel vehicles to CNG compatible costs between N200,000 and N300,000 depending on the choice of kits. The good news is that the conversion comes with a flexible instalment repayment package.
Under the package, motorists pay an initial deposit of N20,000 for the conversion kits while the balance is deducted through subsequent purchase of gas refill. As good as this may sound, the opportunity is dogged by mass ignorance. “Poor awareness is one of the banes of the CNG use,” a lawyer, Mr Andrew Adewale, who took his vehicle for conversion at NIPCO station at Ibafo said.
He claimed he just got wind of the conversion opportunity, despite being a regular user of the road and seeing the CNG station for as long as it has been sited there.
Besides poor awareness, absence of national policy on natural gas utilisation, especially as a vehicular fuel, may be another major hindrance, just as the inability of NIPCO and the Nigerian Gas Company (NGC) Joint Venture to develop new flow lines across the country may be a fatal flaw that may inhibit the CNG spread.
A safety and logistics expert Mr. Patrick Adenusi noted that the lack of; a bold and far reaching gas policy, poor infrastructure architecture, pricing and government support will continue to negatively affect Nigeria’s CNG expansion.
Experts said CNG is cheaper on a mile-to-mile basis than petrol by as much as 50 percent and more than 80 percent compared to diesel. While the price of PMS per litre is N145, a metric cube cost of CNG is N95 in Lagos and N90 in Benin.
Because it is a clean fuel which burns with low carbon deposit, natural gas leaves no lead or benzene on the engine. The lead fouling of spark plugs is also eliminated.
The CNG kits and systems are sealed, which prevents any spill or evaporation. The use of natural gas eliminates the need for expensive oil refineries, improves energy choice flexibility, reduces movement of heavy tankers on roads resulting in reduced improved energy security due to local availability. Also, it reduces the importation of petroleum products, which saves foreign exchange, stimulates local industry and creates employment opportunities for the production of conversion kits and components, such as the manufacturing of cylinders, and other kits, establishments of vehicle conversion and maintenance workshops and the reduction in health hazards through improved air quality.
NIPCO’s Managing Director Mr. Sanjay Teotia, x-raying the challenges, the values and the future of CNG at a gas summit last week in Lagos, said Nigeria cannot be an exception because there has been an increased global support for natural gas transportation. He said the policy and regulatory support were, however, needed to create incentives that would be at par with other fuels.
Teotia noted that to underscore the global relevance of natural gas as a sustainable transportation fuel, light duty vehicles, such as cars and SUVs, as well as heavy duty vehicles, were being produced by major vehicle manufacturers.
He said embracing CNG would reduce dependence on imported oil, save valuable foreign exchange, reduce subsidy burden on the government and ensure better utilisation of Nigeria’s domestic gas.
With one million vehicles on natural gas, the government, he noted, would save $1.5 billion, which could have been used in buying four billion litres of PMS yearly. Between 2012 and 2016, Nigeria, he further disclosed, saved about $10 million by GGL.
Recommendations
Teotia said some regulatory reforms might be required to stimulate fresh investments in the gas sector. This, according to him, were aimed at generating clear strategic plan that would ensure that the government increased the share of natural gas in the fuel mix, and the establishment of a strong regime of the government commitment liberal licensing for setting up CNG dispensing stations, investments in widespread availability of natural gas through a well-established pipeline distribution network, a waiver regime of customs duties on natural gas vehicles (NGVs), subsidy to owners on vehicle conversion.
Other regulatory frameworks that would encourage NGV are the introduction of NGV in public transportation system – taxi fleet, mass transit buses and the mandate to use NGVs in all ministries, departments and agencies of government whether local, state or federal.
Experts said for a CNG policy to be effective, CNG-dispensing stations have to be tied to the gas pipeline network which exists only in the South, that is, East and West domestic gas network and conscious efforts should be put by the government to ensure gas pipeline availability across the country.
Teotia said the government might also need to put a price cap range to encourage gas use. According to him, a price gap of six to 37 per cent difference between petrol and CNG does not appear to be compelling, as the subsidy on petrol erodes the long-term economic benefit of CNG.
He called for the adoption of CNG to be market operator-set, where price per energy would be equivalent of a litre of petrol, in a manner to encourage conversion, along with a dual pricing structure similar to Argentina, where credit lines cover conversion costs, to be repaid with savings from the use of CNG.
Motorists said the CNG was economical, if the cost of conversion was addressed. Jimoh Akinsanmi, a commercial driver, who has been using a CNG commercial bus since 2013, said it saves money and it is cost effective.
Outside the cost of conversion, he spends N2,600 on liquefied gas to shuttle between Lagos to Ibadan. Hitherto, that distance cost him N7,000 on petrol.
Solomon Ola, a heavy duty truck driver said he had known some peace since the fleet operator of the truck he drives switched to CNG. ‘’I can take a full tank, which comprises eight large gas compressors to Kwara State and back. This costs on the average N25,000 compared tp the N45,000 we spent on diesel on same route,’’ he said.
A commercial driver, Paul, who shuttles between Lagos and Mowe, in Ogun State, wants commercial operators to convert to gas because it is “a cheaper alternative compared to petrol.” For him, “CNG is a bonanza, especially for commercial motorists.”
Daniel Obasa, a truck driver who has been using CNG for one and half years, said he spends N6,500 on CNG to Ibadan, from the N21,000 spent on diesel.
Teotia said these testimonies were encouraging the government to do more. He said it could do more by encouraging the importation of at least 20 percent of CNG-compliant vehicles and reduce import duties on conversion kits.
He urged a slash in the wholesale and retail price of gas by the NGC, a development, which is having a negative effect on the operational cost of the firms, such as, GGL, which markets the CNG.
