By Abdulwasiu Hassan
A year has elapsed since Nigeria's decision to abolish fuel subsidy triggered more than just rumblings of public discontent over the move's domino effect.
The subsidy had been in place since the 1970s, cushioning Nigerian consumers from the petroleum price shocks that most other parts of the world suffered through the decades.
Suddenly, in May 2023, President Bola Ahmed Tinubu's government announced that it was time to end a fuel subsidy regime that had been draining the exchequer to levels that had long become unsustainable.
While the move is done and dusted, ordinary Nigerians continue to reel from its side effects. A litre of fuel that used to sell for about N190 (US $0.12) before the change now costs between N700 and N1,000 ($0.46-0.65).
This has raised the cost of public and private transportation exponentially, alongside an increase in the overall cost of living in Africa's most populous country.
So, what is the government doing to stem the tide even as it sticks to a tough decision that experts believe needed to be taken at some point?
A structured shift to compressed natural gas, or CNG, is apparently the new bulwark against the country's energy woes.
To "reduce the burden of the increase in pump price on the masses”, the government set aside N50 billion ($34 million) to purchase 5,500 CNG-powered buses and tricycles, 100 electric vehicles, and CNG conversion kits.
The idea is to use the country's available natural gas resources to first mitigate the impact of subsidy removal on the cost of living and gradually scale up to focus on growing the economy.
President Tinubu's government has already drafted a policy to incentivise using CNG as an alternative to petrol and diesel in the transportation sector.
Sectoral deficiencies
An abundance of natural gas and its relatively low usage as transportation fuel are seen as paradoxes of the Nigerian economy.
With about 206 trillion cubic feet of proven gas reserves, Nigeria is counted among the top ten countries blessed with such a natural resource. Conversely, according to data from worldometers.info, it is ranked 38th among countries that tap their gas reserves.
The good news is that the Nigerian government has been striving in recent years to make the most of the country's gas riches by encouraging investments in the sector.
President Tinubu recently inaugurated three such companies in Delta and Imo states as part of this initiative. At all three events, he assured prospective investors of improved ease of doing business in the country and hoped their successes would rub off on ordinary Nigerians.
Distribution challenge
The limited number of CNG retail outlets in Nigeria is one of the immediate obstacles in the way of the planned energy transition.
Given this challenge, some automobile dealerships in the country are equipping their cars with a hybrid fuel system that allows users to choose between petrol and CNG, depending on need and availability.
"We are selling both buses and cars that operate on CNG as well as petroleum," Okorie Ifeanyi of Kojo Motors Ltd in Abuja tells TRT Afrika.
"If the vehicle runs out of CNG and a retail outlet is not immediately available for a refill, the driver can switch to petrol mode and continue using the car until the fuel runs out," Ifeanyi says.
The government plans to extend import-duty waivers, subsidies, and other incentives to encourage people to convert their old vehicles to CNG.
"We are rolling out conversion centres throughout the country. We hope to continue providing this service at a subsidised cost and a payment system that allows customers to clear the bill in instalments," says Michael Oluwagbemi, programme director of the Presidential CNG Initiative (Pi-CNG).
The government aims to set up 100 CNG conversion and 60 refuelling centres in 18 states by the end of 2024. The focus will be on mass transit.
Low-emission gains
Another goal of the initiative is to reduce greenhouse gas emissions in the country.
"Vehicles that run on gas make up to 40% less emissions than those using petrol or diesel. Nigeria's commitment to this course will enable her to meet nationally determined commitments under the Paris Climate Accord, to which we are a signatory," says Bayo Onanuga, special adviser to the President on information and strategy.
A safety protocol has already been drafted with 80 standards and regulations that all stakeholders must adhere to.
As the Pi-CNG home page categorically mentions, the stated objective is not profit but "palliative intervention" to ease the "transitive hardships" of fuel subsidy removal.
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