Many in the transportation and petroleum marketing sectors have voiced their displeasure with the current state of the country’s refuelling infrastructure, financing mechanisms, and supply, claiming that these issues are preventing the widespread use of compressed natural gas (CNG) in Nigeria.
Held in Abuja on Wednesday, these issues were voiced during the National CNG Adoption Conference.
Participants included representatives from the gas and petroleum industries, as well as unions representing workers and road transport groups, as well as allied industries. The conference was organised by PETROAN, the National Compressed Natural Gas Forum, and the Petroleum Products Retail Outlets Owners Association of Nigeria, among other groups.
They discussed ways to increase the use of Compressed Natural Gas (CNG) in Nigeria, as well as ways to improve infrastructure, safety standards, and overcome regulatory hurdles.
Conversion facilities, gas distributors, and infrastructure developers cannot succeed on their own, according to Faruk Abdullahi, National Chairman of the National Compressed Natural Gas Forum. Abdullahi argued that professional associations, capital investors, labour organisations, and Nigerian citizens who rely on affordable energy solutions should work together.
According to Abdullahi, Nigeria has to move away from rhetorical campaigns and toward actual execution of policies and programs.
He went on to say that having natural gas reserves doesn’t necessarily mean adoption would happen. Drivers will only convert when the fuel is easily accessible, affordable, secure, and reliable.
He urged transport unions to educate their members, determine who is eligible for vehicle conversions, organise collective conversion projects, and lobby banks for affordable financing.
Instead of focusing on the frequency of conferences, Abdullahi said that the true measure of success would be the number of cars successfully converted, the operating cost reductions achieved by operators, the infrastructure put in place, and the capital mobilised.
After a thorough evaluation of the extant infrastructure, the representatives from the various groups involved concluded that the main problem was an inadequate supply infrastructure.
They cited statistics from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), an upstream regulatory body, and brought attention to the fact that CNG stations often encounter congestion due to a large number of vehicles.
They went on to say that it takes more than N3 billion to build even one CNG station, and they begged the government to do something to keep Nigerian investors from sending money to neighbouring countries.
The Petroleum Tanker Drivers (PTD) group brought attention to the lack of gas stations, saying that there are only a handful of stations that are open for business in the Lagos area and that drivers often have to wait in lines that are fifty vehicles long.
They said that most diesel engines now in use in tankers can’t be modified to run on compressed natural gas, and that most members can’t afford to spend about N100 million on a CNG-equipped truck or engine.
The transport group stressed the need for more stations along transport corridors along the coast, saying that the current network of 90 filling stations and 500 conversion facilities is woefully inadequate for the number of trucks on the road.
Enquiring about the scope of financing arrangements and the relevant interest rates, they further underlined the need of knowledge transfer and the cultivation of local skills for the upkeep of converted vehicles.
Inadequate maintenance methods have rendered many imported trucks with conversion kits non-operational, they observed.
Their frank assessments of the operational difficulties faced by long-distance transport operators were as follows: there are few options for refuelling along the routes between Abuja and Lagos, drivers in Abuja face lines of 250 cars or more, and some stations are underused.
In contrast to the well-established financial infrastructure accessible to industries like agriculture and manufacturing, the participants wanted to know why there wasn’t a dedicated bank for the transportation sector. Because of this, they stressed, carriers have no choice but to pay exorbitant interest rates to commercial lending institutions for financing.
Stakeholders lauded the brave move to eliminate fuel subsidies, which opened the door to renewable energy sources including solar power, compressed natural gas, and electric power. However, they pointed out major gaps in developing infrastructure, financial systems, and human resources, and they encouraged the conference to come up with a detailed declaration outlining ways to solve these issues.
Buyers coming into contractual agreements must show ready to accept delivery or face significant financial implications, they emphasised, underscoring the importance for the sector to build operational frameworks focused on assured gas purchasers.
They noted that Pi-CNG has made good strides by putting demand generation first by establishing conversion facilities, and they also noted that gas storage infrastructure is a capital-intensive investment.
In order for compressed natural gas to become a practical option for millions of businesses and transportation operators in Nigeria, all parties involved have agreed that there needs to be a simultaneous focus on safety protocols, infrastructure development, financial resources, indigenous technical capacity, and reliable supply chains.