Business
FG commits $250m to CNG initiative, targets one million vehicle conversions by 2027
The Nigerian Federal Government has committed at least $250 million to the Compressed Natural Gas (CNG) initiative over the past year, as announced by Engr. Michael Oluwagbemi, the Chief Executive Officer of the Presidential Compressed Natural Gas Initiative (PCNGI).
This significant investment is part of a broader strategy to convert approximately one million vehicles from traditional combustion and diesel engines to CNG by the end of 2027.
At the Nigeria Auto Journalists Association’s Annual Training/Capacity Building Workshop held in Lagos, Oluwagbemi, represented by Strategic Project Adviser Olayinka Rufai, reaffirmed the government’s dedication to advancing the CNG program.
The workshop focused on the theme “CNG/LPG/EV Initiative: Challenges, Sustainability, Opportunities, Alternatives to Fossil Fuels in Nigeria.”
In his presentation, Oluwagbemi outlined the government’s efforts to collaborate with financial institutions to ease the financial burden of vehicle conversions for motorists. He highlighted partnerships with organizations such as InfraCorp, the Bank of Industry (BoI), and the Development Bank of Nigeria (DBN) to facilitate access to funding for the public.
Oluwagbemi dismissed concerns about potential policy changes that could jeopardize the CNG initiative, assuring attendees that additional funding would continue to be allocated to the program.
Although he could not provide specific numbers on the vehicles converted thus far, he emphasized the ambitious goal of transitioning a million vehicles by 2027.
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To ensure safety and compliance with standards, Oluwagbemi noted the collaboration with the Standards Organization of Nigeria (SON) and the National Automotive Design and Development Council (NADDC).
He stated that SON has established over 80 standards for CNG use, while the NADDC is actively involved in the accreditation of conversion centers and certification of conversion kits.
Oluwagbemi also detailed the benefits of CNG for vehicle owners, including a potential reduction in fuel costs by up to 50%. This is particularly beneficial for drivers who depend on their vehicles for income.
He explained that CNG-powered vehicles also incur lower maintenance costs compared to petrol and diesel vehicles, as CNG burns cleaner and produces fewer engine deposits, leading to less frequent oil changes and extending engine life.
He emphasized the safety of CNG, asserting that it is often safer than traditional fuels. CNG cylinders undergo rigorous testing to withstand high pressures, and in the unlikely event of a leak, the gas disperses quickly due to its lighter-than-air properties, significantly reducing the risk of fire.
Mr. Joseph Osanipin, the Director-General of the NADDC, echoed these sentiments, announcing a proposal for zero customs duties on the importation of CNG conversion kits.
Represented by Assistant Director Ikechukwu Okoha, Osanipin shared that the NADDC has begun converting some of its own vehicles to CNG and has procured locally assembled gas-powered vehicles to demonstrate the technology’s safety and efficacy.
Osanipin highlighted the council’s engagement with leading Original Equipment Manufacturers (OEMs) to introduce the best conversion solutions in Nigeria. He emphasized the importance of training local personnel and the manufacturing of conversion kits to support the initiative.
In his remarks, Dr. Benedict John Okoh, CEO of the Universal Automotive Training Academy, noted several benefits of CNG conversion, including environmental advantages, cost savings, enhanced energy security, and prolonged engine life.
However, he pointed out significant challenges, such as the high cost of conversion—ranging from N700,000 to N1,600,000—along with limited infrastructure and ongoing safety concerns that could impede the initiative’s success.
The government’s substantial investment in the CNG program reflects a commitment to exploring cleaner fuel alternatives and enhancing Nigeria’s automotive landscape, while addressing economic and environmental challenges.