Fuel subsidy removal: Making Autogas alternative to fuel for transportation

With the current hardship being faced by Nigerians as a result of the removal of fuel subsidy by the federal government and the over 300 percent increase in the pump price of Premium Motor Spirit (PMS), stakeholders in the transportation and logistics sector are calling on Nigerians to adopt the use of Autogas as an alternative fuel for transportation in Nigeria. Autogas is liquefied petroleum gas (LPG) used as a fuel in internal combustion engines in vehicles and generators. It is the 3rd most popular automotive fuel in the world, with approx. 27m of 600 m passenger cars. However, Nigeria is yet to make significant use of autogas despite the abundance of natural gas reserves of about 206 trillion cubic feet.

Under the prevailing price of petrol of N540/liter (minus subsidy), for a typical Uber Car or commercial Gulf car that works for 8hrs in a day, for every 1-hour runtime, on LPG instead of petrol, it saved N1,428, in a day work of 8hrs, it saves N11,424 on fuel consumption (N15,230 instead of N26,784). In a week if it works for 6 days, it saves N68,544 on fuel, and in a month, it can save N274,176. Assuming the cost of installation is between N100,000 to N250,000 it implies that in a month the vehicle can recover its initial capital on the kits According to Dr. Danjuma Ismail, Director, Transport Technology Centre at the Nigerian Institute of Transport Technology (NITT) Zaria, emissions from petrol engine vehicles have contributed to global warming leading to climate change adding that petrol usage in vehicles has been costing trillions of Naira in subsidy to the FGN. However, autogas (LPG/CNG) will cost nothing to the Government in terms of subsidy. All a motor user needs to do, he said, is to convert his/her petrol vehicle into autogas. “Autogas conversion means installing a conversion kit into a vehicle and involves the installation of a Gas tank, piping, a new ECU, and other filler components in a vehicle Can be completed in some hours without any modification of the parts already on the vehicle. Converted vehicles can run on Autogas (LPG) or Petrol (dual fuel) Virtually all petrol[1]powered vehicles can be converted to use LPG.

Note that the prices for each model conversion may differ due to component requirements and work involvement.” At a one-day stakeholders engagement forum on the provision of technical manpower and facility for the development and promotion of Autogas as a transportation fuel in Nigeria Organised by NITT on 11th July 2023 in Abuja, participants agreed on the need for government to create an enabling environment for the conversion of existing petrol engine vehicles to Autogas vehicles in view of the huge benefits including safer and cleaner environment and cost saving. Among those in attendance was, the Permanent Secretary of the Federal Ministry of Transportation ably represented by Dr. (Mrs.) Mercy Ilori, the Director, of Transport Planning and Coordination (TPC) of the Ministry.

Also in attendance are DG/CE Infrastructure Concession Regulatory Commission (ICRC), representative of the DG/CE National Automotive Design and Development Council (NADDC), representative of the National President Chartered Institute of Logistics and Transport (CILT), National President Chartered Institute of Transportation Administration of Nigeria (CIoTA), President National Union of Road Transport Workers (NURTW), President National Association of Road Transport Owners (NARTO), the Chairman, National Gas Expansion programme (NGEP), Honourable Commissioner of Transport Anambra State, representative of Nigerian Automobile Technician Association (NATA), representatives of the DG Nigerian Maritime Administration and Safety Agency (NIMASA), representatives from the National Environmental Standards and Regulation Enforcement Agency (NESREA), representative of the Association of Bureau De Change Operators of Nigerian (ABCON), representatives of the Federal Ministry of Industry, Trade and Investment (FMITI), MD’s of Kaduna Line Limited, Plateau Express, Adamawa Sunshine, Rivers Transport, National President of the Association of Driving Instructors of Nigeria (ADIN), Lagos Metropolitan Area Transport Authority (LAMATA), FCT Transport Secretariat and over 150 physical participants from all over Nigeria mostly from transport sector and professional bodies as well as Academicians, Transport Unions, Transport Professionals, Investors, Journalists, and other relevant stakeholders.

The forum stressed the need for the use of Autogas as an alternative fuel in Nigeria as the population grew exponentially from 180 million to over 200 million between 2016 and 2019, leading to an increase in the usage of Transport Infrastructure and a rise in the demand for Premium Motor Spirit (PMS) and Diesel (dirty fuels), thus making the industry a major contributor to carbon emissions, which poses a serious threat to human life and the environment. In view of the negative impact of these dirty fuels on the environment, the forum said there was a need for alternative options for transportation fuels such as Liquefied Natural Gas (LNG), Liquefied Petroleum Gas (LPG), and Compressed Natural Gas (CNG) known as Autogas, which should become widely used and accepted as alternative automotive fuel. The Nigeria Gas reserves are about 209 TCF and the Gas Production is between 8.15 – 8.35 BSCFD which is more than enough for the nation. The forum acknowledged the efforts of NGEP in collaboration with NITT in the facilitation and enablement of the successful deployment of Autogas in Nigeria. It however observed that the need; to consider how the project could be funded as well as the impact the use of Autogas would have on the environment, establish Partnerships with Private and Government Institutions to build Capacity on Autogas conversion technology, and enhance the domestication of Autogas conversion technology through reverse Engineering According to the participants, the Autogas project has opportunities to attract investors into the country while the risk factor on the environment and the climate is low.

While transportation contributes to only about 23% of global warming worldwide, it will create jobs and open business opportunities, thereby improving earnings and reducing crime rate and poverty. Regrettably, there is a short supply of manpower for Autogas conversion services in Nigeria despite the huge potential of gas in the country Implementation Status Statistics from the Nigeria Gas Expansion Programme (NGEP), a federal government initiative shows that at present, there are over 9,000 Licensed retail outlets classified fit–for–purpose for co-location of Autogas Fuel nationwide and 50 conversion centers currently upgrading for mass conversion and training of technicians in the country Also some Auto assemblers are already producing fit-for-purpose dual fuel vehicles in the country. NGEP had held extensive multi[1]sectoral stakeholder engagement and secured impressive program support and buy-in. The government is supporting the deployment of over one million conversion kits for trucks and smaller vehicles as well as the optimal availability of all Autogas fuel streams. Hence, it was largely agreed that the Adoption of Autogas technology is good for Nigeria in the short and long term. In a communiqué at the end of the meeting, the participants resolved as follows :

1. That the Federal Ministry of Transportation should collaborate with relevant Stakeholders and the private sector for research, development, and deployment of Autogas Fuel in Nigeria.

2. Federal Government should provide incentives to motorists, especially in the public transport and road freights sub[1]sectors for the conversion kits acquisition as a way of cushioning fuel subsidy removal 3. Government should subsidize the kits or grant import duty waivers on the kits, similar to what happens in other countries.

4. Regulatory institutions should ensure only genuine kits are allowed into the Nigerian market

5. The government and other organizations should support the NITT Autogas initiative

6. Gas marketers should roll out more distribution centers across the country.

7. Government should support research, development, and deployment of alternative-fuel technology either through voluntary agreements with OEMs and fuel providers or through collaborative partnerships with industry players

8. Users of Autogas technology should patronize only service providers with the right expertise.

9. Awareness should be ramped up on the benefit of Autogas to Nigerians and the economy

10. Enabling a Regulatory framework is necessary for the Autogas technology sector to succeed.

11. There is a need for the Federal Government to encourage the establishment of Autogas filling stations in all the Local Governments in the Federation for the proper take-off of the project.

Earlier in his welcome address, the Director-General/Chief Executive of NITT, Dr. Bayero Salih-Farah, said the institute organized the forum with the objective of harnessing views and strategies towards addressing the transportation energy challenges in the country including discussing the manpower and facility gaps for the development of Auto-gas industry in Nigeria.

The institute he said was established by the Federal Government of Nigeria on the 14th of March, 1986 through Decree No. 6 (now CAP116LFN, 2004) with mandates to: Provide Training for Personnel employed in all modes of Transport; serve as a Transport Intelligence Centre for monitoring transport and logistics systems; provide equipment and facilities for the encouragement, promotion, and conduct of research in all modes of transport and logistics; and drive innovations through development of new technologies to meet the demands of the transport and logistics industry. “The Institute’s decision to call for this Forum is necessitated by the current transportation fuel crisis that resulted from the removal of fuel subsidy and the intention of the Institute to explore alternative energy sources for the transportation sector. “In this forum, we are going to concentrate on the Autogas option. With Nigeria’s natural gas reserve at 206.53 trillion cubic feet, the country needs the technical skills and facilities to exploit this God-given alternative for a more sustainable transportation sector.

However, the availability of such technical skills and facilities for the utilization of these natural resources as alternative transportation fuel is currently inadequate in the country. Hence, the resolve of NITT to lead in the provision of such technical skill and facilities across the country”. However, the DG stressed that the provision of such facilities across the country requires a very huge investment, preferably from the Private Sector adding that it was in that spirit, that the Institute resorted to pioneering a Public-Private Partnership (PPP) Project in the provision of adequate technical manpower and facilities across the country that would enable the adaptation of Autogas as alternative transportation fuel at the lowest cost possible. Endorsing the initiative, Director[1]General/Chief Executive of the Infrastructure Concession Regulatory Commission (ICRC) Mr. Mike Ohiani applauded the NITT initiative which he said would go a long way in reducing emissions on the roads and other environmental hazards as well as ease transportation challenges in Nigeria. “Autogas as an alternative to fuel is a welcome development. We in ICRC support this initiative. It is a step in the right direction towards the success of the project”, Ohiani said.

Source: News National Star

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