Why Nigeria must switch to Compressed Natural Gas
Nigerians are said to be consuming about 45 million litres of fuel daily, while the nation’s major refineries could scarcely produce 12 million litres of the product. The development leaves the country with no option than to continue to import the product, which is currently facing serious constraints as a result of foreign exchange scarcity in the country. There is no doubt major consumption of fuel in the country is being borne by vehicles which have continued to increase in droves. The partial removal of fuel subsidy by the current government which saw increment in the pump price of fuel to N145 which is said to be unsustainable currently due to foreign exchange constraint and the economic recession in the country.
It is believed that one cheaper and cleaner energy source vehicle owners in Nigeria have not adequately explored is the Compressed Natural Gas (CNG)in spite of huge deposits of gas in the country. Currently, Nigeria’s gas reserve has hit 190 trillion standard cubic feet. Compressed Natural Gas is a fossil fuel substitute for gasoline (petrol), diesel fuel or propane/LPG. Its combustion does produce greenhouse gases. It is a more environmentally clean alternative to petrol and diesel fuel, and much safer than other fuels in the event of a spill. The idea of using natural gas as fuel for vehicles is not new as there have been natural gas vehicles in Italy since the 1930s. There has also been a rapid growth of natural gas vehicles market in the last 10 years. Currently, 25 million natural gas vehicles are said to be circulating in the world consuming about 1000 billion cubic feet of gas annually. The growth in the use of natural gas for vehicles in the world hit 30% in the last three years. It is said that Compressed Natural Gas can earn the federal government over N200 billion from every one million cars converted into CNG from petrol engine.
Compressed Natural Gas for vehicles was launched in Nigeria in 1989 with two small compressors and dispensers installed in Warri and Lagos. Twenty-five vehicles were converted to run on natural gas but this was inadequate to meet the demand. In 2007, the Nigerian Independent Petroleum Company (NIPCO) Plc got licence to operate Compressed Natural Gas business in the country. Thus the company diversified into Compressed Natural Gas refilling facilities in partnership with the Nigeria Gas Company for the deployment of CNG in the country, which resulted in the establishment of Green Gas Limited. Managing Director, Nigerian Independent Petroleum Company (NIPCO) Plc, Mr Venkataraman Venkatatapathy, advised motorists to embrace the use of CNG as alternative to petrol as well as lower operating cost. “On mile to mile basis, CNG will be cheaper than petrol by over 50 percent and as compared to diesel (on dual fuel mode) it will be over 45 percent. "To replace 20 percent of current petrol consumption of Nigeria, natural gas requires is less than 4 percent of the total domestic gas consumed currently and less than 0.5 percent of the current gas production.
Foreign exchange saved will be close to $2 billion." He also said the use of CNG has social and environmental benefits to Nigerians compared to other energy sources. Some motorists, who spoke with our correspondent, confirmed the benefits of the CNG since they switched over to it. Femi Adeyemi, a commercial bus driver, who plies Ibadan route, said he needed the sum of N2,600 to fill his tank from Lagos to his destination. This was a far cry from the N7,000 fuel he buys to run his journey. Oluwole Obasa, a truck driver spends the sum of N6,500 to fill his tank from Ibafo to Ilorin compared to N21,000 he spends on fuel. Today, Obasa and Adeyemi are counting their gains in the last two years of migrating to Compressed Natural Gas, but the company is still not satisfied with the level of consumption of CNG in Nigeria.
The recent involvement of one of the subsidiary companies of one of Nigeria’s billionaires, Alhaji Aliko Dangote, in the CNG business in the country which was anticipated to be a game changer has not really put paid to the popularity and consumption of the gas in Nigeria with over 170 million population Sagas, a division of Borkir Energy Company Limited, a subsidiary of Dangote Group recently signed a 20-year sales and purchase agreement with the Nigeria Gas Company Limited (NGC) to supply and distribute the CNG to all its filling stations nationwide. Stakeholders are of the opinion that inadequate investments in the CNG project in the country, cost of conversion kits as well as harsh regulatory environment are the low points of the use of CNG in the country.
They recommended that government should consider liberalising the process of licensing of CNG in the country, saying the development would earn more revenue for the government as well as create job opportunities for more Nigerians thereby narrowing the poverty level in the country . General Manager of NIPCO Plc, Rajesh Prabhu, expressed the need to have a special price for natural gas to encourage investors in CNG to deepen the market in the country. He said 10 percent of imported vehicles should be on natural gas, while the cost of conversion kits should be critically looked into. He also advocated the need for the federal government to boost gas infrastructure in the country.
To former president Olusegun Obasanjo, inadequate promotion for the CNG was responsible for the low and unimpressive consumption of CNG in the country He therefore advocated the need for paradigm shift in the attention given to CNG, adding that the development has economic benefits and would reduce unfriendly automobile emissions and exposure of Nigerians to the innovation of powering vehicles on gas.
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