Nigeria turned to natural gas as transport prices rose after petrol subsidies were removed

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ABUJA, Nigeria (AP) — When Nigeria’s President Bola Tinubu ends costly subsidies that made gasoline affordable for many in Africa’s most populous country, Ahmed Halilu knows his e-hailing taxi business in the capital, Abuja, will suffer big losses. .

Transport costs rose as petrol prices rose more than three months in the months following last year’s decision, sparking the country’s worst cost-of-living crisis in a generation. This means a reduction in Halilu’s passenger numbers and ultimately profits.

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In what it says will reduce transport costs by almost 50%, Nigerian authorities in August introduced a compressed natural gas (CNG) initiative to tap its largest natural gas reserves – the largest in Africa – and launched CNG buses to replace petrol-powered vehicles. that.

More than 100,000 vehicles have been adapted to run on CNG or with a hybrid option of CNG and gasoline, and at least $200 million has been invested by the government under the initiative, according to its director, Michael Oluwagbemi.

The government aims to convert 1 million of the more than 11 million vehicles in Nigeria over the next three years, but analysts say the process is slow, pointing to poor implementation and limited infrastructure.

Although Nigeria is one of Africa’s top oil producers, it is dependent on imported refined petroleum products as its refineries struggle, with production at its lowest in decades amid oil theft.

Together with other reforms introduced by Tinubu after coming to power in May last year, the removal of subsidies is supposed to save government money and reduce foreign investment.

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However, this affects the price of everything, and rising transport costs force people to abandon their vehicles and walk to work.

Switching to gas is difficult. In addition to the lack of an adequate network of CNG conversion and filling stations – available in 13 of Nigeria’s 36 states – the success of government initiatives has also been limited by a lack of public awareness.

That has left room for misinformation and hesitation among drivers.

“People don’t like it because they don’t have an orientation,” Halilu said. He converted his vehicle and now saves $240 a month on gas costs in his e-hailing business.

Some drivers have feared that their cars could explode with CNG conversion – claims that regulatory agencies have said are not true unless the equipment is installed inappropriately. In southern Edo state, authorities discovered that the CNG-powered vehicle that exploded had been operated by an unaccredited vendor.

Even in Abuja and the economic center of Lagos, filling stations are rare and the few available conversion workshops are often lined up with commercial vehicles waiting for days to switch to CNG at subsidized rates.

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Meanwhile, the cost of switching private vehicles is 20 times Nigeria’s minimum monthly salary of $42.

A colleague had to travel about 200 kilometers (124 miles) to Abuja to refill his cylinder, said Abdul Manasseh, an e-hailing taxi driver in Abuja.

Another challenge facing the initiative is the limited gas pipelines in Nigeria, which makes supplying stations difficult. As a result, most of the northern and eastern parts of the country have not been reached.

The challenge is encouraging the shift to electric vehicles in Nigeria, where adoption by private operators has been slow. Electricity supply remains adequate for most of the country’s 210 million citizens, mainly due to lack of investment and vandalism.

The government understands there is still “a lot of uncertainty” around the CNG initiative and is working to correct misunderstandings and provide the necessary infrastructure, said Tosin Coker, the initiative’s head of commercial affairs.

“CNG is a cleaner fuel, it’s a cheaper fuel and a safer fuel compared to the gasoline we’re used to,” Coker said. “So you’ll have more money in your pocket and it’s cleaner for the environment.”

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