President Bola Tinubu recently launched an ambitious proposal to transform public transportation in Nigeria by deploying compressed natural gas (CNG) consumption buses around the country. This substantial step is part of a broader attempt to reduce transportation costs following the country’s withdrawal from the petrol subsidy regime. President Tinubu highlighted during his Independence Day speech that additional CNG conversion kits are on their way, with all hands on deck to speed the typically lengthy procurement process. He said that this endeavor ushers in a new age of public transportation in the country, ushering in more cheap and safer CNG-powered buses.
Since the elimination of the gasoline subsidy in May, CNG vehicles and conversion kits have been essential components of the federal government’s palliative program. Authorities believe that this innovation would not only lower commute costs, but will also function as a proactive step to avoid labor union rallies and dissuade Nigerian citizens from going to the streets in response to growing energy bills.
To ease the deployment of CNG-powered vehicles, the federal government set aside N100 billion for the purchase of 3,000 20-seater buses. The federal government recently announced the Presidential Compressed Natural Gas Initiative (PCNGI), which waives value-added tax (VAT) on CNG bus purchases.
As the implementation of this program commences, here are some key insights into CNG buses and their role in transforming Nigeria’s transportation landscape:
What Are CNG-Powered Buses?
Compressed Natural Gas (CNG) is a transparent, odorless, and non-corrosive natural gas that can be used as a replacement to standard gasoline. It is compressed to the point where it is lighter than air, occupying only around 1% of its original volume. CNG is used in transportation as a cleaner and more cost-effective alternative to traditional gasoline and diesel fuels. CNG-powered vehicles, which are mostly constituted of hydrocarbon gases and vapors with a high methane content, work similarly to gasoline-powered vehicles, employing spark internal combustion engines.
Is It Cheaper?
President Tinubu’s declaration that “subsidy is gone” in May effectively ended decades of subsidy payments. However, it also resulted in a significant increase in the pump price of petrol, exceeding 100 percent. This spike in transport costs across the country prompted discussions on reducing dependence on petrol.
In response, oil marketers pledged to donate 100 mass transit CNG buses to alleviate the effects of subsidy removal and advocated for the adoption of CNG as an alternative energy source. President Tinubu noted that CNG buses would operate at a fraction of the current petrol prices, positively impacting transport fares. Furthermore, oil marketers project that CNG, once fully deployed, will be over 400 percent cheaper than petrol. However, energy expert Jide Pratt suggests a more conservative estimate, stating that using CNG to fuel vehicles could result in approximately 40 percent cost savings. He also highlighted that building CNG infrastructure, such as holding plants and refill locations, takes more time compared to traditional petrol outlets.
CNG Cost per Kilogram
Toyin Subaru, special assistant to the president on special duties and domestic affairs, indicated that CNG would cost N230 per kilogram, significantly lower than the price of petrol, which is sold at a higher rate. The federal government plans to develop an app to help consumers locate CNG stations, allowing them to purchase gas at a considerably reduced cost. This initiative is expected to save Nigerians about two-thirds of their transport expenses. Subaru also disclosed the government’s goal of having one million CNG vehicles on Nigerian roads by 2027. According to the Nigerian Gas Association (NGA), CNG is suitable for various vehicles, including cars, tricycles, vans, and lorries, but not petrol generators.
Why CNG?
In December 2020, the federal government launched the National Gas Expansion Program (NGEP), focusing on converting cars and generators from petrol to CNG. This program aimed to complete at least one million vehicle conversions by the end of 2021, aligning with the government’s objective of providing a more cost-effective alternative fuel for equipment and vehicles. Nigeria’s abundant gas reserves, totaling over 200 trillion cubic feet, make CNG a viable and sustainable option. This transition to CNG is expected to reduce the challenges associated with importing fuel and reduce foreign exchange expenditures. Additionally, CNG vehicles are quieter than their petrol and diesel counterparts, resulting in less noise pollution and lower emissions, contributing to improved energy security.
The deployment of CNG-powered buses in Nigeria marks a significant step toward reducing transportation costs and fostering a more sustainable and cost-effective energy solution. While challenges remain, including the need to develop CNG infrastructure, this initiative demonstrates the government’s commitment to enhancing the country’s transportation sector and reducing its reliance on petrol.