Compressed Natural Gas (CNG) adoption in Nigeria is facing significant hurdles due to a lack of refueling infrastructure. Despite the government’s push to promote CNG as a cheaper alternative to petrol, with prices soaring by 237 per cent since April 2023, only 50 CNG stations exist nationwide, servicing over 200 million people.
This is as the Small and Medium Enterprise Development Agency of Nigeria (SMEDAN) has launched its first Compressed Natural Gas (CNG) Conversion and Training Center at the Industrial Development Center (IDC) in Idu, Abuja.
President Bola Tinubu’s administration initiated the Presidential Compressed Natural Gas Initiative (PCNGI) to convert one million vehicles to CNG by 2026, but progress has been slow.
Currently, over 100,000 vehicles have been converted, yet many Nigerians remain hesitant due to high conversion costs and limited station availability.
PCNGI Project Director/CEO, Michael Oluwagbemi, giving a “Status Update on the Presidential CNG Initiative,” noted that over $200 million has been invested in developing CNG infrastructure, creating thousands of jobs as additional conversion centres are established to meet rising demand.
“To date, over 100,000 vehicles have been converted from petrol to CNG/bi-fuel-powered, and more conversion centres are being established across the country.
Public sentiment is mixed; while many see CNG as a viable solution to rising fuel prices, the immediate costs and scarce refueling options deter widespread adoption. A survey indicated that 70 per cent of Nigerians are open to using CNG but cite infrastructure as a major barrier.
Safety concerns also loom large, with incidents of explosions linked to poorly regulated conversion centers. This has further fueled skepticism among potential users. As the government invests over $200 million into the initiative, the need for more robust infrastructure and public education is critical for fostering confidence in CNG as a sustainable fuel alternative.
Meanwhile, SMEDAN said the initiative is aimed at promoting cleaner energy and reducing business costs for small and medium enterprises (SMEs).
Speaking during the launch, director-general, SMEDAN, Charles Odii, explained that the center, a collaboration between SMEDAN, Rolling Energy Ltd. and the Presidential CNG Initiative (Pi-CNG) is part of SMEDAN’s commitment to converting at least 10 percent of the one million CNG vehicles mandated by President Bola Ahmed Tinubu to hit Nigerian roads by 2027.
With a capacity to convert nine vehicles daily, he said the center is also designed to train young Nigerians in CNG conversion, maintenance, and repair, creating new entrepreneurial opportunities in the growing green energy sector.
“The President has given a mandate that he wants a minimum of one million CNG vehicles on the road by 2027. We at the Small and Medium Enterprise Development Agency of Nigeria are committed to taking 10 percent of those cars to be converted by our centers.
“This is a cheaper way to run businesses. Our small businesses are confronted. These are challenging times for small businesses. And we’re not oblivious of that fact.
“But we know that this is a long-lasting way to reduce the cost of running a business. We’re providing infrastructure,” he said
Odii, emphasising the economic and environmental benefits of adopting CNG, explained that CNG offers a more affordable alternative to traditional fuel. “For example, it costs approximately N102,000 to travel 108 kilometers between Abuja and Kaduna with petrol, but with a CNG-converted vehicle, the cost drops to just N7,500,” he stated.
He said the center also aligns with SMEDAN’s GROW Nigerian strategy, which focuses on providing SMEs with Guidance, Resources, Opportunities, and Workforce support.
He noted also that in addition to cost reduction, the initiative creates a new value chain, encompassing gas supply, metering, and conversion, while fostering entrepreneurship in Nigeria’s abundant gas sector.
“So it’s actually cheaper to run businesses on CNG. And that’s what we’re doing. The first thing we’re doing is we’re reducing the cost of doing business in Nigeria.
“The second most important thing is we’re creating new entrepreneurs. We have gas in abundance. So we’re creating a new value chain of those who are going to be supplying the gas.
“Those who are going to be in charge of the metering . Those who are going to be in charge of conversion. Those who are going to be in charge of training.
“We’re committed that by the end of 12 months, we will have successfully trained approximately 1,000 small businesses that started from this one center. And we imagine the multiplier effect when we open the other 22 centers. And open many of them with more people.
“So I want to encourage all the entrepreneurs here with us today. Please embrace CNG. We are not playing lip service,”
To address rising fuel costs and sustainability challenges, Odii stated that SMEDAN is upgrading industrial centers nationwide with green energy solutions.
According to him, The Idu IDC, for instance, has been solarised in partnership with the United Nations Development Programme (UNDP) to ensure uninterrupted power supply. Also SMEDAN has established the Climate and Green Energy Desk to promote sustainable practices among SMEs.
CEO, Rolling Energy Limited, Mubarak Umar Danbatta, highlighted the safety and efficiency of the conversion process, noting that it complies with rigorous international standards to prevent explosions.
“You have the high pressure rails and the cylinders. With the cylinders, we don’t cut corners. So the narrative of explosion is not going to happen
“We’re using 34 CRM04 cylinders, which means that the thickness is no less than eight millimeters. And the bursting pressure for this is 430 bars. So to put that in perspective, 230 bars is what is needed for you to run your vehicle.”
In addition to providing free CNG conversion kits for commercial vehicles through the Presidential Compressed Natural Gas Initiative (PCNGI), the programme enables trained entrepreneurs to set up their own centers.
Danbatta explained that Certified SMEs will receive grants to establish conversion stations, which will be supported with customer lists and payments of N150,000 per converted vehicle.
“And to put in perspective again, it takes about 60,000 to 65,000 naira to fill up this vehicle. And if you’re going to use it with gas, it’s going to cost you less than 4,000 naira. So if I want to put in perspective again, for every four times you go to the gas station to get your CNG filled up, it would never surmount to 60,000 naira with petrol.
“So it’s a no brainer. And to go in line with the presidential initiative, we want to thank the DG for SMEDAN for adopting this policy, because he’s creating a domino effect to roll out this program in partnership with Rolling Energy and the PICNG across 23 locations.
“And the whole essence is to empower and make sure that the nominated trainees can go about setting up their own outfits to continue the domino effect of doing these conversions,” he said