The Federal Government is urging state governments to play a proactive role in the nation’s energy transition, with a special emphasis on developing Compressed Natural Gas (CNG) infrastructure.
This call to action was made by a spokesperson from the Presidential Compressed Natural Gas Initiative during a recent press briefing in Abuja. The spokesperson highlighted the essential contribution states must make to advance the energy transition agenda outlined by President Bola Tinubu.
State governments are reminded that they are the primary beneficiaries of enhanced transportation and energy policies, and they should take the lead in investing in CNG infrastructure.
“The pivotal role of states in this energy transition cannot be overstated. States manage transportation policies, and the Federal Government can only encourage them to adopt energy-efficient vehicles and invest in infrastructure,” he stated.
The spokesperson pointed out that states have significant control over regulations concerning transportation, and by investing in energy transition initiatives, they can benefit from increased revenue distributions.
“States are the first in line to gain from higher revenue distributions. Thus, their investment is crucial,” he noted.
He encouraged state governments to promote the conversion of petrol-powered vehicles to CNG among private individuals and civil servants, as well as to invest directly in the dispensing infrastructure for CNG.
The government is strategically working to expand CNG infrastructure along major transit corridors to ensure the energy shift benefits a large portion of the population. The three prominent routes identified for CNG infrastructure deployment are Calabar to Benin, Lagos to Kano, and Lagos to Benin via Lokoja.
“We are directing investments to the corridors that serve the highest number of users. Approximately 90% of Nigerians utilize these major transit routes,” he explained.
Providing CNG refueling stations along these corridors is anticipated to lower transportation costs and reduce the overall cost of goods, particularly food.
“By doing so, we expect a noticeable decrease in food prices,” he added.
In response to concerns from independent petroleum marketers regarding the financial burden of installing CNG dispensing equipment, he pointed to provisions in the Petroleum Industry Act that allow access to the Downstream Gas Infrastructure Fund through the appropriate regulatory authority.
“Members of relevant associations can apply for funding to support their CNG installations, and we are working toward creating a framework that addresses these financial challenges,” he explained.
A recent study by the authority has identified around 14,000 potential CNG dispensing opportunities across Nigeria, indicating a tremendous potential for enhancing CNG availability.
As part of advancing this initiative, agreements have been established with various transportation unions to ensure fair pricing for CNG-powered vehicles.
“We have secured agreements with key transportation unions to establish cost-reflective pricing for these vehicles,” he said, also mentioning plans to label CNG vehicles for easy identification to encourage passengers to request lower fares from CNG operators.
While acknowledging that some vehicles continue to operate on petrol, he expressed confidence that as the adoption of CNG increases, market competition will naturally lead to reduced transportation costs. “As CNG becomes more prevalent, the competitive market will drive prices down,” he concluded.
