As the average price of Premium Motor Spirit (PMS) in Nigeria surged by 237% from April 2023 to September 2024, Nigerians are left to make tough decisions about how to manage transportation costs as the Nigerian government introduced Compressed Natural Gas (CNG) as an alternative to petrol. This has put pressure on a lot of people to decide on which option is better on their wallets.
On Thursday, July 4, 2024, the Group Chief Executive Officer of NNPC Limited Mallam Mele Kyari, during the simultaneous commissioning of 12 CNG stations in Abuja and Lagos, disclosed that the drive to bring Compressed Natural Gas (CNG) closer to Nigerians has since commenced and is irreversible.
He noted that the NNPC Ltd and its partners would also build three Liquefied Natural Gas (LNG) stations in Ajaokuta.
According to him, “There is simply no way to turn back on delivering CNG for all Nigerians. It is the right thing to do. Is it late? Yes, but we will make progress, we will cover the gap in order to ensure that the volatility we see with Premium Motor Spirit (petrol) does not apply to gas.”
Also speaking at the occasion, the Managing Director, NNPC Retail Limited, Mr. Huub Stokman revealed that in the next one year, NNPC Retail would have launched over 100 CNG sites, including 16 NNPC Gas Marketing and NIPCO Gas JV sites.
“CNG provides Nigeria with affordable alternatives to existing available fuel products. It will be about 40% cheaper than petrol in Nigeria and with continued investments, it will become a significant part of our energy mix,” Stokman added.
On his part, the Chairman of the NNPC Board of Directors, Chief Pius Akinyelure said increased CNG adoption will foster economic benefits by reducing fuel costs for consumers and businesses alike.
This report takes a data-driven look at the advantages and drawbacks of both fuels, comparing costs and practicality for the average Nigerian.
The Rising Cost of Petrol
Immediately after the swearing-in on May 29, 2023, President Bola Ahmed Tinubu announced the removal of fuel subsidy which has since then left Nigerians struggling with drastically increased costs for daily living, from transportation to food. The price of petrol has kept increasing ever since then.
According to data from Intercity, there are significant fluctuations in the prices of Premium Motor Spirit (PMS) across the country. For instance NNPC is selling at the rate of ₦998 per litre while other retailers like Mobil sells for ₦1,050, NIPCO ₦1,050, etc.
With this price, the cost of transportation has increased putting pressure on households who can barely afford three square meals a day. For the majority of Nigerians who rely on petrol for cars, buses, and generators, these price hikes have further strained their already limited budgets.
According to the National Bureau of Statistics, in July 2024 the average fare paid by commuters for bus journeys within the city per drop decreased by 2.18% from ₦963.58 in June 2024 to ₦942.61 in July 2024. On a year-on year basis, it declined by 29.46% from ₦1,336.29 in July 2023. In another category, the average fare paid by commuters for bus journey intercity per drop was ₦7,117.17 in July 2024, indicating an increase of 0.35% on a month-on-month basis compared to ₦7,092.03 in June 2024.
A typical driver of a petrol-fueled vehicle who consumes 50 litres per week now spends about ₦49,990 weekly, that’s if it was gotten from NNPC at the rate of ₦998 per litre. This has led to growing discontent, especially among commuters and transport workers, who are forced to pass on higher costs to consumers.
CNG: Is It Really Cheaper?
Since the recent drastic increase in PMS, Compressed Natural Gas (CNG) has been said to be a cheaper alternative to petrol.
“CNG provides Nigeria with affordable alternatives to existing available fuel products. It will be about 40% cheaper than petrol in Nigeria and with continued investments, it will become a significant part of our energy mix,” Stokman disclosed.
According to a statement released by Michael Oluwagbemi, project director, Presidential Compressed Natural Gas Initiative (PCNGi), President Bola Tinubu has made Compressed Natural Gas (CNG) available for vehicles at just ₦230 per litre, in a step to reduce petrol costs and offer Nigerians an affordable alternative to petrol and diesel.
A social media influencer known as Man of Letters on X (Formerly Twitter) disclosed that CNG powered transport is actually cheap, primarily because we have Natural Gas in embarrassing abundance (over 200 trillion cubic ft), yet we haven’t embraced it for some reasons.
“I don’t know exactly what the problem is, but it’s adoption can, as a matter of fact, reduce our dependence on Petrol and significantly lower public transport costs (by at least 40%),” he stated
“See some active real life examples: Mowe/Ibafo — Berger on Danfo costs between N800-N1000 (peak & off peak). The same route costs N300 (to any bus-stop along the route) if you use the Ogun State CNG mass transit buses.
“Within Abeokuta: Ita Oshin—Adatan is N500 with regular green & yellow taxis. Same journey with Ogun State CNG buses costs ₦150 max. Ita—Oshin to Lafenwa costs ₦50 if you use Ogun CNG. Taxis will charge you ₦200-₦250 for the same trip. Ita-Oshin to Adatan with a regular taxi is ₦500. With Ogun CNG, it’s ₦150.”
The table shows that CNG is a cheaper option compared to petrol. A vehicle using CNG can save a driver around ₦30,250 weekly. Additionally, CNG-powered engines typically require less maintenance, further reducing costs for drivers.
Another thing to consider is that fuel efficiency is a key factor when comparing CNG to petrol. A petrol-powered car consumes 1 litre of petrol for every 9-11 kilometres on average, depending on the car model, driving conditions, and maintenance. This means it takes roughly 0.1 to 0.125 litres of petrol to drive 1 kilometre.
For instance, Small, fuel-efficient cars are expected to use 15-20 km/L, Medium-sized cars (10-15 km/L), while SUVs and larger vehicles are expected to use an average of 8-12 km/L.
To calculate the amount of fuel you consume, this formula can help to calculate how much fuel you consume “Fuel Consumption (L/100 km) = (Litres Used X 100) ÷ Kilometres Travelled”
This formula is widely recognized as the standard for measuring fuel consumption. It allows you to assess how efficiently your vehicle uses fuel.
On the other hand, CNG-powered vehicles are said to be more fuel-efficient. A CNG vehicle is expected to consume 1 Standard Cubic Metre (SCM) of CNG in 10.67 kilometres of travel.
The Drawbacks of Switching to CNG: Conversion Process and Potential Cost Savings for Nigerian Drivers
With the increasing demand for cost-efficient fuel alternatives, the conversion of petrol engines to Compressed Natural Gas (CNG) is gaining attention among Nigerian drivers. Speaking on the process, Mr. Kolade, an expert in the field, shared insights into the conversion procedure and its potential benefits.
“The process of converting a petrol engine to a hybrid one involves installing a CNG kit into the vehicle, along with a gas tank,” Mr. Kolade explained. “This kit includes both mechanical and electrical components. The electrical aspect involves an Electronic Control Unit (ECU) that communicates with the car’s brain box to optimise the system. The mechanical parts supply gas from the tank to the engine’s manifold.”
After installing these components, the system must be calibrated to ensure synchronisation with the car. According to Mr. Kolade, while most cars can be converted, vehicles with carburetors are not currently suitable for CNG conversion.
Discussing the costs involved, Mr. Kolade highlighted that conversion prices vary depending on the number of cylinders in the vehicle and the conversion centre used. “At BOVAS, it costs ₦730,000 to convert a four-cylinder vehicle and ₦900,000 for a six-cylinder vehicle. If the owner wants an extra tank, that will cost an additional ₦450,000.”
In terms of fuel savings, Mr. Kolade emphasised that CNG can significantly reduce fuel costs for drivers. “CNG can save up to 65% of fuel costs, especially for those who cover long distances regularly,” he said. CNG is measured in Standard Cubic Metres (SCM), and according to Kolade, “A 17 SCM tank can cover approximately 200 kilometres in a four-cylinder car, with CNG currently priced at ₦230 per litre at filling stations in Ibadan.”
However, Kolade also pointed out the challenges facing CNG adoption in Nigeria, particularly the limited availability of CNG filling stations and the high conversion costs. Despite these obstacles, he noted that CNG remains a cheaper alternative to petrol, offering substantial savings in the long run.
For maintenance, Mr. Kolade assured that CNG-powered vehicles do not require any special care beyond the usual servicing for petrol cars. However, he advised vehicle owners to seek immediate inspection if they notice any faults or leakages.
What Do Experts Think?
Public opinion is divided. While many Nigerians recognize the long-term benefits of CNG, the immediate costs of switching and the limited availability of CNG stations are major concerns. A recent survey by Dataphyte found that 70% of Nigerians are open to using CNG but cite costs and infrastructure as the main barriers.
According to Mr Adeola Adigun: “CNG is not a long term alternative for us in Nigeria, but with the current situation surrounding the economy and hike in petrol prices, it is the best alternative for now. The reason being is that it is cheaper than petrol and it is more environmentally friendly.”
“Now, the drawback about CNG is that we don’t have the availability and as regards conversion, it’s still not affordable to many Nigerians. Also, transporters who require their boot space to carry luggage, won’t have enough or no space to keep passengers luggage once they put two tanks or a tank of CNG at the back because it takes too much space,” he noted.
He emphasised that the long run for Nigerians should be electric vehicles. “That’s what we should be thinking about for how to pursue easy mobility but for now CNG is a better alternative.”
According to Mr Kunle Kudaisi, a renewable energy enthusiast, CNG (Compressed Natural Gas) can be associated with or “washed”—most times it’s washed—to remove other additives and chemicals used in different industries. It originates from the same source as crude oil but is processed at a different cracking level, which is where products like diesel and kerosene are derived. Both CNG and petrol are technically renewable, but petrol has higher global demand because its octane rating makes it suitable for a wide range of machines, especially automobiles.
CNG can also power engines with minor modifications. In colder climates, CNG—when re-expanded after being exported as LNG (Liquefied Natural Gas)—is used for: Cooking, Heating, and Automobiles.
“However, in Nigeria, the infrastructure to fully utilise CNG is lacking. Our cities and towns are not planned for CNG pipelines, which would require extensive planning and proper metering. Certified workers are also needed to manage this infrastructure, which we currently do not have. Presently, we mostly use CNG in canisters, not through a proper pipeline network.
“We are underutilizing our CNG resources, even though we have substantial reserves (you can search for global gas discoveries to see how much gas has been found). Nigeria has one of the largest LNG plants in the world, yet we tap only a fraction of its potential. Industries have begun using gas to power furnaces and machinery, which shows the potential of gas-powered technology,” he stated.
In his words, “A good example of innovative gas technology is the Afam Gas Plant. It uses gas to power two turbines, and the exhaust from these turbines powers a third one, making it a certified Clean Development Mechanism (CDM) facility. This could be a model for the future, but unfortunately, we may be late in fully realising its potential.”
In addition, from an environmental perspective, CNG is a cleaner fuel than petrol, emitting fewer pollutants. This could help reduce air pollution in cities and lower the country’s carbon footprint. For a nation grappling with climate change and global pressure to adopt cleaner energy sources, the switch to CNG aligns with global sustainability goals.
Economically, wider adoption of CNG could reduce Nigeria’s dependency on imported petrol, which drains the country’s foreign reserves. With Nigeria being rich in natural gas resources, promoting CNG could also create jobs in the gas sector and stimulate the local economy.
Beyond the controversy going on around the use of CNG as an alternative for petrol to cushion the effect of the hike in PMS, CNG still presents a cost-effective and environmentally friendly alternative to petrol. Though, without wider availability and more government support, it may remain out of reach for many Nigerians. As fuel prices continue to climb, the demand for cheaper alternatives will only grow. If the Nigerian government and private sector can overcome the infrastructure and cost challenges, CNG might be the solution that many Nigerians are looking for.