Beyond CNG: Why electric vehicles hold the key to Nigeria’s fuel crisis
Despite being an oil-rich nation and OPEC member, Nigeria’s petroleum industry has been grappling with longstanding challenges. Successive administrations have struggled to address inefficiencies, regulatory failures, inadequate supply, relentless price hikes, and distribution of substandard products. Corruption has become entrenched, leaving the public frustrated and awaiting a solution. In 2011, former President Goodluck Jonathan launched […]
Despite being an oil-rich nation and OPEC member, Nigeria’s petroleum industry has been grappling with longstanding challenges. Successive administrations have struggled to address inefficiencies, regulatory failures, inadequate supply, relentless price hikes, and distribution of substandard products. Corruption has become entrenched, leaving the public frustrated and awaiting a solution.
In 2011, former President Goodluck Jonathan launched a campaign to remove the subsidy on petroleum products, citing that it only benefited a select few and hindered the nation’s economy. However, this move was met with fierce resistance from the public. Despite the backlash, the government announced the removal of the subsidy in January 2012, leading to a significant increase in pump prices and nationwide protests.
The widespread demonstrations forced the administration to reconsider, resulting in a partial removal of the subsidy. Consequently, the price of Premium Motor Spirit (PMS) rose from N65 to N97, but was later reduced to N86.50, where it remained until the end of Jonathan’s tenure in May 2015.
When President Muhammadu Buhari took office, he continued the push to remove fuel subsidies, a campaign that ultimately led to the total deregulation of the sector. This move had a significant impact on fuel prices, jumping from N86.50 to N145. However, the challenges persisted, and the price was later adjusted to a range of N185 to N200 depending on location, where it remained until the end of his administration. Unfortunately, this came with severe consequences, including soaring inflation and a drastic reduction in the purchasing power of the Nigerian people.
It’s worth noting that despite Buhari’s stance on subsidy removal, his administration spent more on fuel subsidies than his three predecessors combined. This highlights the complexity and challenges surrounding Nigeria’s fuel subsidy policy.
Nigerians did not know how the subsidy manoeuvre its way back to the economy after the said total deregulation. President Bola Ahmed Tinubu’s inauguration on May 29, 2023, marked a significant shift in Nigeria’s fuel subsidy policy. During his inaugural speech, he announced the removal of fuel subsidies, citing budgetary concerns. This decision led to a staggering increase in fuel prices from N200 to N617. The consequences were far-reaching, with skyrocketing transport fares, high inflation, reduced standard of living and other related challenges.
The situation has only worsened with the government continuing to hike pump prices to over N1,000 per litre. This has left many Nigerians struggling to make ends meet, with concerns about meeting basic needs like food, education, and healthcare.
President Bola Ahmed Tinubu’s administration promised to procure 3,000 Compressed Natural Gas (CNG) buses to mitigate the effects of subsidy removal. This move is expected to provide a cheaper alternative to Premium Motor Spirit (PMS) and make transportation more affordable for Nigerians. The government also promises to establish conversion centres and provide conversion kits to facilitate the transition to CNG.
However, experts raise concerns about the feasibility of CNG as a long-term solution. They point out that Nigeria lacks the necessary gas infrastructure to support widespread adoption of CNG. Additionally, there are concerns about the safety risks associated with CNG, including the limited range of CNG-powered vehicles and the high initial investment costs.
Although, Compressed Natural Gas (CNG) has gained widespread adoption in countries like Argentina, Iran, Pakistan, Brazil, India, China, and Egypt, many of these nations are now shifting their focus towards Electric Vehicles (EVs) as a more sustainable, efficient, and environmentally friendly transportation solution for the long haul.
Embracing electric vehicles (EVs) and electric bikes (e-bikes) present a more sustainable and forward-thinking solution to Nigeria’s transportation challenges. Unlike CNG and PMS, EVs and e-bikes offer a cleaner, environmentally friendly alternative, reducing carbon emissions and air pollution. With the abundance of solar energy in Nigeria, investing in solar-powered charging infrastructure can provide a reliable and renewable energy source.
Moreover, EVs and e-bikes require less maintenance and have lower operating costs, making them an attractive option for Nigerians. By incentivising the adoption of EVs and e-bikes through tax breaks, subsidies, and investment in charging infrastructure, the government can create a thriving eco-friendly transportation sector, reducing dependence on fossil fuels and promoting a healthier environment for future generations. This strategic shift can also position Nigeria as a leader in Africa’s clean energy transition.
China’s remarkable electric vehicle (EV) revolution offers a compelling blueprint for Nigeria to follow. With over 50 per cent of the world’s EV market share, China has made tremendous strides in adopting sustainable transportation. Through strategic government incentives, investments in charging infrastructure, and innovative manufacturing, China has become the world’s largest EV producer.
Today, China boasts over one million public charging points, with many cities achieving 50 per cent EV adoption rates. Nigeria can draw valuable lessons from China’s success, particularly in implementing policies like tax exemptions, subsidies for EV buyers, and investing in charging infrastructure. By emulating China’s EV strategy, Nigeria can reduce its dependence on fossil fuels, minimise environmental pollution, and create a thriving eco-friendly transportation sector, driving economic growth and improving the quality of life for its citizens.
Iran’s impressive electric vehicle (EV) growth offers valuable insights for Nigeria. Despite economic sanctions and other challenges, Iran has made significant strides in embracing EVs. The government’s incentives, such as tax exemptions, low-interest loans, and free parking, have encouraged EV adoption. Local manufacturers like Iran’s Khodro and Saipa have partnered with foreign companies to produce affordable EVs. Iran’s EV market has grown by 50 per cent annually, with over 20,000 units sold in 2022. Notably, the country aims to have 1.4 million EVs on the road by 2025.
Nigeria can learn from Iran’s success in implementing targeted incentives, promoting local manufacturing, and investing in charging infrastructure. Furthermore, Iran’s experience in leveraging EVs to reduce air pollution and mitigate fuel imports can inform Nigeria’s own efforts to address environmental and economic challenges. By emulating Iran’s EV strategy, Nigeria can create a sustainable transportation sector, reduce dependence on fossil fuels, and improve the quality of life for its citizens.
As Nigeria navigates its fuel crisis, electric vehicles emerge as a beacon of hope. Envision a future where Nigerian roads hum with efficient, eco-friendly EVs, powered by renewable energy. A future where transportation is cleaner, cheaper, and more accessible. With strategic policy interventions and investments, this vision can become reality. Let us look beyond CNG and fossil fuels, and accelerate Nigeria’s transition to an electric vehicle revolution, a future that promises prosperity, sustainability, and a better life for all.
Lawan wrote from Hausawa Asibiti Ward, Potiskum Yobe State and can be reached via [email protected]