Nigeria to Slash Petrol Imports by $4.4bn with Compressed Natural Gas Adoption

Nigeria is set to reduce its annual petrol importation by approximately $4.4 billion through the adoption of Compressed Natural Gas (CNG), the Federal Government announced on Tuesday. This initiative, spearheaded by the Presidential Compressed Natural Gas Initiative (PCNGI), aims to convert one million diesel and petrol-powered vehicles to run on CNG.

Zayyan Tambari, Coordinator of Regulations, Compliance, and Facilitation at PCNGI, revealed this during a presentation at the Co-Creation Session on the Nigeria Gas Vehicle Monitoring System in Abuja. Tambari noted that the conversion would save the country about $4.4 billion annually on petrol imports. The government’s goal is to replace 20 per cent of the 50 million litres of petrol consumed daily with CNG.

The Federal Government has already commenced rolling out CNG-powered buses and tricycles. Special Adviser to the President on Information and Strategy, Bayo Onanuga, confirmed that the deployment began in Ilorin, Kwara State, with the launch of a refuelling and conversion centre by Governor Abdulrahman Abdulrazak. CNG buses and tricycles were also unveiled at the event.

Meanwhile, at the Abuja session, PCNGI stated that around $890 million in investment would be needed to develop the infrastructure for this alternative fuel. The Minister of State for Petroleum Resources (Gas), Ekperikpe Ekpo, represented by Abel Nsa, emphasized the importance of harnessing Nigeria’s gas resources and addressing safety issues in CNG usage.

“We need to educate ourselves and use specific tools and materials that we have not used before,” Ekpo stated. He drew a parallel with the economic impact of mobile phones introduced during President Olusegun Obasanjo’s regime, highlighting the transformative potential of CNG.

Ogbugo Ukoha, Executive Director of Distribution System, Storage and Retailing Infrastructure at the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), announced that new filling stations would only be licensed if they provide CNG dispensing points. “We are also engaging stakeholders to mandate fuel trucks and fleet owners to convert to CNG given the high cost of diesel,” he added.

Michael Oluwagbemi, Project Director and CEO of PCNGI, underscored the benefits of gas as a cheaper, cleaner, and more sustainable fuel compared to crude oil. He stressed the importance of a smooth transition and strict regulatory compliance. “We need cooperation from all ecosystem members, from inspection to conversion, manufacturing to installation, ensuring a strong regulatory regime,” he said.

Oluwagbemi also announced the commencement of a nationwide CNG conversion programme for mass transit buses. “This initiative aims to convert mass transit vehicles to cleaner energy sources, significantly reducing emissions and promoting environmental sustainability,” he said. The initial phase will begin in Lagos, Kwara, the Federal Capital Territory, and Rivers states, in collaboration with major transport unions.

“The rollout will commence at eight of over 120 designated conversion workshop sites, with plans to scale up operations across 15 states in the next 45 days,” Oluwagbemi concluded.