Azu Ishiekwene: Gas car rigmarole, questions Tinubu can’t ignore

It was not meant to be this way. But like a good number of things Nigerian, the story is hardly complete without a twist in the tale. And so it has been for at least three years now with the story of the gas car that was supposed to lessen, if not end, Nigerians’ petrol misery.

Sometime in 2020, state oil company, Nigerian National Petroleum Company (now NNPC Limited), launched what it advertised as the National Gas Expansion Programme (NGEP). The major objective of the programme, according to NNPC Group CEO, Mele Kyari, was to harvest gas for car fuel. This was in addition to expanding its use for domestic cooking.

 

At the official launch of the programme on December 1, 2020, Kyari said given how important the project was for the government’s pursuit of cleaner, safer and cheaper energy, NNPC would provide the conversion free of charge to car owners and transporters.

“You bring your car to a location,” he said, “and then we fit in the things you need to call the gas and also to receive the gas into your car. All the one million cars that we promised will be done through a structure that the Ministry of Petroleum Resources will put in place to ensure that any Nigerian who has to convert his car will get it done for free.”

Kyari said at the time that outside Abuja, the retrofitting and service centres would be available in 12 other states, adding that the Ministry of Petroleum Resources would bear the burden “until the private sector can come in.”

To demonstrate how serious the government was about the programme, NNPC promised the Nigeria Labour Congress (NLC) 100 gas-powered buses, out of which I think 50 or so were delivered.

As surely as big money never fails to follow big talk in conspiracies that often end in heart-breaking scandals, the Central Bank offered N250 billion to “support” the NNPC’s gas car value chain. This “support” fund was announced at least four months before the programme was officially launched.

 

A statement by the Bank in August 2020 said each beneficiary would get a maximum of N10 billion at between five and nine percent with a one-year/18-month moratorium for 10 years disbursable in the case of small and medium scale enterprises, through the NIRSAL Microfinance Bank.

All of this was nearly three years ago. As you read this piece, no one is sure how many of the estimated 12million registered cars in Nigeria are gas-powered or how many of the estimated 6.7million of registered commercial vehicles out of the 12m are on gas. The best guess is on the website of NIPCO, a private limited oil and gas company, with a strong Indian presence.

NIPCO claims that it has converted 5600 cars to gas, but the data does not say whether this is the total number of cars converted in the last 19 years since NIPCO started LPG delivery. Or just what type of gas conversions took place – whether LPG-type (liquified petroleum gas, more commonly available); or CNG-type (compressed natural gas, with very few plants available in Nigeria). We also don’t know how many of the 13 service and retrofitting stations which Kyari announced three years ago are ready.

Was the CBN’s N250 billion gas value chain support fund disbursed? If so, how much and what is left of it? Who were the beneficiaries and what have they done with the money? I tried in vain to get the answers. Perhaps the bank or the Ministry of Petroleum Resources can help.

Two years after the NGEP was announced, Businessday published a story entitled, “FG’s autogas policy falls short,” in which the newspaper reported that, “A combination of infrastructure, high cost of gas, lack of proper planning and prevailing harsh economic realities have affected the implementation of the autogas policy.”

It’s on top of this mess that Ajuri Ngelale, the Special Adviser on Media and Publicity to President Bola Ahmed Tinubu, announced last week the establishment of the Presidential Compressed Natural Gas Initiative (PCNGI) “to revolutionise the transportation landscape in the country, targeting over 11,500 new CNG-enabled vehicles and 55,000 CNG conversion kits for existing PMS-dependent vehicles.”

Ngelale sounded like a repurposed version of CBN’s August 2020 memo, with the warmed-over promises of NNPC. But I’ll come to that.

Again, just as it happened when Kyari promised that one million cars will run on gas and that, for a start, over one dozen service stations across the country will be available to provide support, NNPC has promised that in the short run the new gas project would be supported by NIPCO. Kyari did not say how NIPCO’s infrastructure would meet the demand.

Information on NIPCO’s website as of today claims that Nipcogas – a JV project in which NNPC’s subsidiary Nigerian Gas Company (NGC) owns majority shares – has 15 CNG stations in Benin and is contemplating expansion both in Benin, Edo State; and in Ibafon, Ogun State. But insiders told me that there are only 12 stations in the country as of now, out of which Nipcogas owns 11. How the current infrastructure will convert 11,500 petrol cars to LPG and CNG, much less provide 55,000 conversion kits remains to be seen.

The demons are, however, in plain sight. The same demons that haunted Kyari’s grandiose plan to convert one million cars to autogas, and also turned the CBN’s N250 billion to pork barrel, will return to haunt the “PCNGI revolutionary initiative” enthusiastically announced by Ngelale.

It’s not hard to see why. The things Businessday cited as impediments to the execution of NGEP after its launch have not changed – not the system or the people behind it. If anything, thanks to corruption, they have metastasized, with concerns that at least N90 billion of the N250 billion set aside by the CBN to “support” the gas value chain may have been diverted.

It is also surprising that the government will prioritise CNG over LPG when the latter is not only more readily available, but is also relatively cheaper to convert and maintain. Can we even talk about conversion without data of car owners’ attitude and readiness?

And then there’s the supply problem. A viable gas car service without steady gas supply is a pipedream. Africaoilgasreport.com reported on August 18 that in spite of huge oil and gas assets owned 100 percent by NNPC, which could significantly improve its oil and gas production and evacuation potential, the company prefers to play “the politics of financial engineering.” NNPC has become the successor of the Central Bank in the business of everything.

Also, while the Nigerian Liquefied Natural Gas (NLNG) said it was still producing in spite of declaring a force majeure in October last year as a result of flooding in the Niger Delta, the company has not vacated the force majeure, raising serious concerns about viable supply.

And why, in any case, does CNG have to become a “presidential initiative?” Are we going to have a presidential initiative on LPG, a presidential initiative on LNG and perhaps a presidential initiative on presidential initiative? The system is broken not because of an absence of a presidential initiative, but because NNPC, its subsidiary NGC, and the refineries that should lead the gas pathway have failed.

If in nearly 50 years of NNPC only about 10.5 percent or roughly four million Nigerian households use cooking gas, how can the government prioritise car gas over households through a presidential initiative salvation army, a purely ad hoc arrangement?

Which serious investors will put down their money in an arrangement that completely ignores the history of past failures and present concerns about mind boggling corruption? And how, by the way, can key institutions such as the National Automotive Design and Development Council (NADDC) and the National Agency for Science and Engineering Infrastructure (NASENI) be left out in any sustainable plan for autogas?

Tinubu has enough problems on his plate. Hugging a special purpose initiative to nowhere will not do him much good. If the government is really keen on gas cars, then he must return to where the rain started beating us.

Ishiekwene is Editor-In-Chief of LEADERSHIP