The Nigerian government’s ambitious plan to transition vehicles from traditional gasoline to Compressed Natural Gas (CNG) is a multi-faceted initiative involving various stakeholders and strategies. While the anticipated loan program for private drivers to facilitate vehicle conversions is yet to be launched, other aspects of the Presidential Compressed Natural Gas Initiative (PCNGI) are showing significant progress. This initiative aims to address the economic and environmental challenges posed by reliance on gasoline, promoting a cleaner and more affordable fuel alternative.
The PCNGI recognizes the financial hurdles involved in converting vehicles to CNG, especially for private drivers. To address this, a loan program is being developed in collaboration with Credit Corp and other financial institutions. This program, scheduled for implementation in the second quarter of 2025, will provide eligible drivers with access to financing to cover the conversion costs. However, the framework for the loan program is still being finalized, including details on eligibility criteria, loan amounts, repayment terms, and participating financial institutions. This meticulous planning phase is crucial for ensuring the program’s effectiveness and sustainability, taking into account the diverse financial landscape and needs of potential borrowers.
While the loan program is still under development, other components of the PCNGI are already demonstrating positive outcomes. Notably, a significant number of vehicles have been converted to CNG, with over 40,000 conversions recorded to date. The PCNGI played a direct role in incentivizing 10,000 of these conversions in the past year, reflecting the government’s commitment to accelerating the adoption of CNG. Moreover, the Commercial Incentive Program, designed to support commercial vehicle operators, is making strides towards its target. This program, launched in the fourth quarter of 2024, provides free or subsidized conversions for commercial vehicles, recognizing the critical role of the transport sector in the Nigerian economy. This targeted approach acknowledges the higher mileage and fuel consumption of commercial vehicles, making them ideal candidates for reaping the economic and environmental benefits of CNG.
One of the major challenges accompanying the rising adoption of CNG is the limited refueling infrastructure. Long queues at existing CNG stations have become a common sight, reflecting the growing demand outpacing the available refueling capacity. The PCNGI acknowledges this challenge and attributes it to the significant increase in vehicle conversions coupled with the time required to build and commission new CNG stations. Establishing a daughter station, which refers to a smaller-scale CNG dispensing unit, involves various processes, including site selection, equipment procurement, construction, safety inspections, and regulatory approvals. These procedures, while necessary for ensuring safe and reliable operations, can be time-consuming, contributing to the temporary lag between vehicle conversions and refueling capacity.
Despite the challenges, the PCNGI is actively addressing the refueling infrastructure gap. Significant progress has been made in expanding the network of CNG stations across the country. From a mere 11 functional stations in January 2024, the number has risen to 54 licensed stations across 10 states, demonstrating a rapid expansion of refueling capacity. Furthermore, private sector investment, including participation from the Nigerian National Petroleum Company Limited (NNPCL), NIPCO, Bovas, Matrix, and AY Shafa, has spurred the construction of an additional 85 stations. With this ongoing development, the PCNGI projects that at least 125 to 150 refueling stations will be operational in 18 states within the next year. This expansion aims to alleviate the current strain on existing stations, reducing waiting times and ensuring convenient access to CNG for vehicle owners.
The PCNGI exemplifies a comprehensive approach to promoting CNG adoption in Nigeria, involving various incentives, infrastructure development, and public-private partnerships. While the loan program for private drivers awaits its launch, the progress observed in other areas of the initiative signals a positive trajectory for the transition to CNG. The expansion of refueling infrastructure, coupled with the success of the commercial incentive program and the increasing number of vehicle conversions, lays a solid foundation for a cleaner and more sustainable transportation sector. The initial challenges, such as long queues at refueling stations, are expected to be addressed as the infrastructure catches up with the growing demand. The long-term vision of the PCNGI promises not only economic benefits through reduced fuel costs but also environmental advantages through reduced emissions, contributing to a healthier and more sustainable future for Nigeria.
