Asiko announced the official launch of its depot for liquefied petroleum gas (LPG) and compressed natural gas (CNG) in Benin City, Edo State.
The inauguration ceremony took place on Friday, September 15. The company highlighted that this facility would play a vital role in enhancing the availability and efficient distribution of gas within the region.
With a capacity of 300 metric tons (MT), this depot stands as the largest in Benin, signifying a significant stride towards promoting a cleaner energy future.
As stated on the company’s LinkedIn page, this initiative aligns with the Federal Government’s vision, particularly the “Decade of Gas” initiative, further emphasizing Asiko Energy Holdings Limited’s commitment to shaping a sustainable energy landscape.
The Decade of Gas Context
The Tinubu administration has taken steps to implement the decade of gas initiative introduced by the Buhari administration by appointing a Minister of State for Gas (Ekperikpe Ekpo) under the Petroleum Resources Ministry as well as establishing a framework for the development of compressed natural gas (CNG) infrastructure across the country to provide CNG to Nigerians as an alternative to petrol which now costs N617 on average after the removal of fuel subsidies.
Recall that Nairametrics reported that in August 2023, the Nigerian National Petroleum Company Limited (NNPCL) announced that it had signed an agreement with Nipco Plc to develop CNG infrastructure.
According to the NNPCL, the first phase will comprise 21 CNG stations which will support intra-city transportation and will be ready by the first quarter of 2024.
The second phase comprising 35 CNG stations will support intercity transportation and be ready in 2024.
The first and second phases will be further complemented by the additional 56 stations to be deployed by NNPC Retail stations across the country.
Note that Nipco Gas is currently operating 14 CNG stations across Nigeria and has converted over 7,000 vehicles to run on CNG.
The CNG and LPG context
Although the Nigerian government has officially made CNG the alternative fuel for Nigerians through its agreement with Nipco, it is important to know the basics of both fuels.
In August 2023, Mele Kyari, the Group Chief Executive Officer of NNPCL said that CNG is even safer than petrol and he does not anticipate any problems with motorists carrying CNG cylinders in the trunk of their vehicles.
In a recent interview with the NNPCL via its “Energy and You” series, Nagendra Verma, the Managing Director of Nipco Gas Limited said petrol costs N620 per litre in Abuja, compressed natural gas for cars in Abuja costs N213 per scm (standard cubic meter).
He also noted that while diesel sells for about N850 per litre, CNG for vehicles that use diesel in Abuja costs around N219 per scam.
Meanwhile, it costs between N100,000 to N400,000 to convert a petrol vehicle to a CNG-powered vehicle, depending on the kind of engine the vehicle has.
In August 2023, Nairametrics conducted an exclusive interview with Felix Ekundayo, the President of the Nigerian Liquefied Petroleum Gas Association (NLPGA).
He said that converting to LPG for conventional vehicles falls within the range of N300,000 to N400,000. Meanwhile, tricycles (keke napep) can be converted at a cost ranging from N100,000 to N200,000.
The conversion cost for larger vehicles like vans and lorries is estimated at N18 million, which reflects the cost difference between a gas-engine truck and a diesel-engine truck.
When considering the return on investment, the recovery time for converted petrol vehicles stands at approximately N40 per kilometre, equating to around 40% throughout 9 to 12 months.
For Keke nappes, the recovery time translates to N10 to N15 per kilometre, corresponding to an impressive 50% to 75% return over a similar 9 to 12-month period.
Vans and lorries, on the other hand, boast a faster recovery time, averaging N360 per kilometre, and yielding returns between 3 to 4 months.
