CNG adoption: Transport unions, petroleum marketers cry out over crowded stations, other obstacles

These concerns were articulated on Wednesday during the National CNG Adoption Conference held in Abuja.

The conference, coordinated by the Petroleum Products Retail Outlets Owners Association of Nigeria, PETROAN, and the National Compressed Natural Gas Forum, among other organizations, witnessed the presence of stakeholders from the petroleum and gas sector, labour unions, road transport organizations, and allied industries.

Abdullahi stressed that Nigeria must transition from informational campaigns to substantive implementation, and from declarative policies to concrete action.

He further noted that possessing natural gas reserves does not automatically facilitate adoption, as vehicle operators will only undertake conversion when fuel is readily obtainable, economically viable, secure, and dependable.

He encouraged transport unions to provide member education, assess vehicle conversion eligibility, coordinate collective conversion initiatives, and advocate with financial institutions for accessible financing options.

Abdullahi asserted that the genuine indicator of success would be measured by the quantity of vehicles securely converted, the operational cost reductions realized by operators, the infrastructure established, and the capital mobilized, rather than the frequency of conferences convened.

The representatives from the participating groups presented a comprehensive assessment of substantial deficiencies in the current infrastructure, identifying the primary obstacle as an inadequate supply infrastructure.

They referenced data provided by the upstream regulatory authority, the Nigerian Upstream Petroleum Regulatory Commission, NUPRC, and highlighted that compressed natural gas, CNG, stations frequently experience congestion with numerous vehicles.

They further emphasized that the establishment of a single CNG station requires an investment exceeding N3 billion and appealed to the government to implement incentive mechanisms to prevent Nigerian investors from relocating their capital to adjacent nations.

The Petroleum Tanker Drivers, PTD, organization underscored the scarcity of refuelling facilities, noting that a limited number of operational stations exist in the Lagos region and that vehicle queues frequently extend to approximately 50 units.

They indicated that the majority of existing diesel engines installed in tanker vehicles cannot be retrofitted and that the acquisition of a CNG-equipped truck or engine requires an investment of approximately N100 million, an amount beyond the financial capacity of most members.

The transport organization emphasized that the existing infrastructure of 90 refuelling stations and 500 conversion facilities is substantially insufficient relative to the volume of trucks operating on roadways and advocated for the establishment of additional stations along coastal transportation corridors.

They additionally stressed the necessity for technology transfer and the development of indigenous expertise for the maintenance of converted vehicles, and inquired regarding the extent of financing arrangements and the applicable interest rates.

They noted that numerous trucks imported with conversion kits have become non-operational due to inadequate maintenance practices.

They articulated candid observations regarding the operational challenges encountered by long-distance transport operators, emphasizing that routes between Lagos and Abuja provide limited refuelling alternatives, that drivers in Abuja encounter queues comprising 250 or more vehicles, and that certain stations remain underutilized.

The participants inquired regarding the absence of a specialized banking institution for the transportation sector, contrasting this with the established financial infrastructure available to agriculture and industry. They emphasized that transporters are consequently compelled to secure financing from commercial lending institutions at elevated interest rates.

The stakeholders commended the elimination of fuel subsidies as a courageous initiative that facilitated access to alternative energy sources, including compressed natural gas, solar energy, and electric power. Nevertheless, they identified significant deficiencies in infrastructure development, financial mechanisms, and human capital development, and urged the conference to formulate a comprehensive statement addressing strategies to tackle these challenges.

They underscored the necessity for the sector to establish operational frameworks centered on assured purchasers of gas, emphasizing that buyers entering into contractual agreements must demonstrate readiness to accept delivery or incur substantial financial consequences.

In their assessment, gas storage infrastructure represents a capital-intensive investment, and they acknowledged that Pi-CNG has demonstrated effective progress by prioritizing demand generation through the establishment of conversion facilities.

The stakeholders reached consensus that safety protocols, infrastructure development, financial resources, indigenous technical capacity, and dependable supply chains must be addressed concurrently to enable compressed natural gas to emerge as a viable alternative for millions of Nigerian transportation operators and commercial enterprises.