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Industry Experts Decry High Cost of Autogas Conversion in Nigeria, Seek Govt. Collaboration

Following the removal of fuel subsidy and its attendant harsh effect on transportation and the economy in general, stakeholders in the Transport and Energy Sectors have lamented the high cost of vehicle conversion to autogas (LPG).

Speaking at the Nigeria Auto Journalists Association (NAJA) 2023 annual training workshop held in Lagos recently, with the theme ‘Fuel Subsidy: Autogas/Electric Vehicles As Alternatives” Industry experts chorused that, despite being the best alternative for the operators in transport and logistics chain of the economy, high cost of conversion of vehicles from petrol to gas remains a hindrance.

According to the CEO/Founder, Creek Transitway Limited, an Energy Company developing natural gas solution for Transport and Power Sectors, Mr. Elijah Wisdom, financing for conversion is a challenge, because the operators lack the initial capital to convert.

Conversion from PPMS to CNG, he pointed out, comes at an average cost of N300,000 to N350,000, which most transporters would not be able to pull out at a go.

He described public transport operators, including tricycles, taxis and buses, as the movers of the economy, whose operations are actually having a direct impact on the economy.

Towards tackling the problem, he said, Creek Transitway Limited has built a model that enables transporters to convert their vehicles and pay in installments.

To this end, he sought collaborations and guarantees from the government, especially of the different states.

“With the CNG adoption,” he stated, “we want the government to stand as guarantors to propel finance institutions to fund conversion. We’re not asking the government for money but to guarantee.

“The government is already pushing for conversion to gas. But the challenge is the implementation. Funding is needed to implement this. The gas expansion fund is actually domiciled with the Central Bank of Nigeria (CBN). But now the rules the CBN gave to access the fund is stringent.”

Elijah also advised state governments to diversify their revenue by investing in the CNG value chain, stressing that every investor in conversion would enjoy a return in investment.

He said: “To convert 1000 keke (tricycle) costs N350 million and in some states you have a minimum of 30,000, also taxis and buses are in huge numbers.”

Elijah noted that conversion remains expensive, because none of the kits is manufactured in Nigeria, assuring that the costs would come down, when kits are made locally.

He said his company is already on the lookout for a company that can set up a conversion kit centre, using local materials.

He stated further: “Off takers are very important in this case. For tricycle owner might not show interest in converting them to gas, because of the cost. But if you tell them there’s a partnership they’ll be interested.

“So we want to target the off takers; what we did was to develop a model that would make the investors see their investment.”

Also speaking at the NAJA event, the Executive Chairman & Founder of Funtay, Engineer Olufunso Amoo, advised commercial transport operators to think outside the box for their conversion rather than waiting indefinitely for government.

He revealed that his company was already working with some banks to ensure vehicles are converted, stating that 300 kekes can be converted in three months if the full money is paid.

“Where we are now is that we have a lot of yearning for alternative fuel, but we need to find a local solution for financing rather than wait for the government, the government itself is struggling. Let’s be creative; talk with union leaders, go to one localized area, finish with them and go to another one,” Amoo advised.

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