The adoption of Compressed Natural Gas (CNG) as a vehicle fuel in Nigeria is on the rise, according to oil marketers who attribute the growth to bank-funded vehicle conversion programs. The development was highlighted in a recent industry survey, signaling a shift in the country's transportation energy landscape.
Bank-Funded Conversions Drive CNG Uptake
Oil marketers, speaking under the auspices of the Major Oil Marketers Association of Nigeria (MOMAN), noted that financial institutions have begun offering loans specifically for converting petrol-powered vehicles to CNG. This financing model is seen as a key catalyst in overcoming the initial cost barrier that has previously hindered wider CNG adoption.
The survey, which polled marketers across several states, found that the number of CNG conversions has increased by over 30% in the last quarter alone. This surge is directly linked to the availability of bank credit, which allows vehicle owners to spread the conversion cost over time, making the switch more economically viable for commercial transporters and private car owners alike.
Economic and Environmental Impact
The shift towards CNG is expected to have significant economic implications, particularly in reducing the country's import bill for petrol and diesel. According to the marketers, a typical conversion costs between ₦500,000 and ₦1 million, but the long-term savings on fuel are substantial, with CNG priced at roughly half the cost of petrol per equivalent energy unit.
Environmentally, CNG produces fewer greenhouse gas emissions compared to traditional fossil fuels, aligning with Nigeria's commitments under the Paris Agreement. The marketers emphasized that the increased adoption is not just an economic decision but also an environmental one, contributing to cleaner air in urban centers.
Challenges and Next Steps
Despite the positive trend, the marketers acknowledged lingering challenges, including limited CNG refueling infrastructure outside major cities and the need for more conversion centers. They called on the government and private sector to expand the network of CNG stations and to provide incentives for local manufacturing of conversion kits.
The survey's findings are expected to inform policy discussions as the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) considers new regulations to standardize CNG conversion practices. The authority has already signaled its support for the adoption of CNG as a cleaner alternative, and the latest data will likely accelerate the rollout of supportive policies.
As the bank-funded conversion schemes gain traction, oil marketers project that CNG could account for up to 20% of the country's vehicle fuel consumption within the next two years, a development that would mark a significant milestone in Nigeria's energy transition journey.
