CNG: Nigeria’s energy market demands necessary gas infrastructure

Nigeria’s inflation has raced to a very unsustainable level that everyone living in the country (both the rich and the poor) no longer finds it funny with the astronomically high prices of every good or service in the economy. This development took a new dimension after the 29th May 2023 announcement of fuel subsidy removal. One observation from everything happening, especially in the face of the lamentations in several quarters, is the obvious strategic role energy production and consumption plays in Nigeria’s economy.

The matter is not just one of “demand and supply” but a more serious case of poorly managed administrative responsibilities in the oil and gas sub-sector of the economy. This ultimately resulted in multi dimensional failures in the nation’s macroeconomic calculations, manifested in price instability and a tumbling local currency exchange rate. The resultant effect of this maladministration that has adversely affected the entire economic landscape for many decades has been the clear manifestation of a total collapse in virtually all aspects of economic productivity in the local manufacturing subsector. This observed sluggard economic attitude and unimpressive social status, eventually turned the country to a “consumption nation”, even on things we offer competitive and comparative advantage to the world market as primordial resources, like crude oil and gas.

Making critical observations from the microeconomic point of view, every individual citizen of this country has come to terms with the fact that the narrative has to change, as the situation on ground is very precarious. This is because it directly affects the aspects of energy consumption, especially the cost of transportation in the country. This present energy issue has proved one fact, that “energy is life” and the fuel for consumption, which drives economic and commercial activities, for overall prosperity. We are witnesses to all that play out in the economy at the moment. The point, therefore, is that, having identified an alternative window of escape from the present economic hardship, within the gas value chain in the energy sector, which satisfactorily aligns with the three critical factors in micro-managing the energy issues (vis-a-viz the economic viability, environmental sustainability and the social factor), why not fully embrace it?

The compressed natural gas (CNG) that is otherwise called “green fuel” in climate compliance parlance is the alternative way to go (economically) and it is also the cleaner energy of the future (for Nigerians). It roundly satisfies the aspect of energy efficiency (in both the environmental aspect and its social dimension). CNG is also readily available, in terms of reliability for energy security. CNG is also playing out, satisfactorily, to be very affordable and cheaper in terms of pricing (economically). Ultimately, it has an overall attractive advantage on the environment for environmental sustainability in the current global war against global warming with the ongoing United Nations (UN) pioneered climate action measures, for mitigation of the greenhouse gas (GHG) through decarbonization process of reducing carbon emissions responsible for all manner of environmental catastrophe (ranging from rising sea level, flooding that results from rainstorms, heat waves, droughts and desertification, wildfire, melting of the glacial ice, wind storms in the forms of tornadoes, cyclones, hurricanes; to other extreme weather conditions) being experienced globally.

CNG, therefore, as a cleaner energy (although not a renewable energy, but sourced as a fossil fuel) is presently being adopted in the federal government’s initiative (towards cushioning the economic impact of fuel subsidy removal), programmed under the energy transition plan project, has a strategic role and significant impact to play within the economy (if properly harnessed locally in an efficient manner). As it is already being popularly embraced by virtually everyone that has known about its attractiveness in terms of its economic importance (especially). We need to make inputs by narrating part of our experiences in shifting (through conversion) from the exorbitantly priced petrol to the much cheaper CNG.

CNG supply chain and distribution infrastructure within the economy appears to be posing a major challenge that might hamper its effective and efficient distribution flow to consumers (especially for vehicles, both private and commercial, that need to regularly refuel their tanks at various retail outlets). This is a critical area the government needs to quickly focus more attention (as a matter of urgency) because, without the infrastructure on ground (pipelines and refuelling stations), vehicles that have already converted are presently facing the product’s scarcity due to the fact that retail outlets are presently scanty in most of our metropolitan cities (like Abuja and others). Take for instance, in Abuja, a driver that wants to refuel from Garki II, will do a 30 minutes drive down to the Airport road, which is about 20 kilometres (one way trip), just to re-gas a 60 or 75 litre tank; and then spend the same 30 minutes going back (making another stretch of 20 kilometres). Something has to be done very quickly about this perceived handicap in CNG distribution networks all over the country otherwise the route for refuelling will not be sustainable but, shall become counterproductive to the national economic efficiency.

The simple template might just be attaching a refuelling point in all the existing fuel stations, all over the country (the regulatory body, NMDPRA knows better, how best to actualize this). Having that bottleneck resolved, there’s definitely going to be a significant turnaround in the overall commodity pricing index within the economy; which will impact favourably on the nation’s economic growth and development (all things being equal).