Light at the end of the subsidy tunnel: How Nigeria can leverage Autogas for a more sustainable tomorrow

The recent announcement by the Federal Government (FG) to halt the subsidisation of Premium Motor Spirit (PMS), popularly known as Petrol or gasoline, has left many struggling to come to terms with this new reality. Faced with soaring petrol prices and an expected rise in the cost of living, the average Nigerian, who survives on less than $1 a day, is first in line to feel the short-term impact of the fuel subsidy removal.

Today, the price of petroleum retails at around 500 Naira per litre at all filling stations operated by the Nigerian National Petroleum Corporation (NNPC), a sharp increase of about 200%, which has, as expected, catalysed commodity inflation in almost every other sector. Transportation costs have now nearly doubled in the country, an unsurprising effect for a country dependent on petrol for our residential, commercial, transportation, and industrial operations.

However, in the face of this seemingly daunting climate, the Nigerian government has an opportunity to ameliorate the financial impact of the subsidy removal. This opportunity is gas!

Lite Gas branded LPG cylinder powering a diesel generator
2.2kva generator converted for dual-fuel efficiency, runs on both petrol and LPG autogas

Up until now, the subsidy on petrol resulted in a paradox where imported petrol was sold cheaper post subsidy than domestic gas, leading to large quantities of gas being flared.

The potential of gas in Nigeria’s current economic climate – an Autogas perspective

Asiko, with a view that the removal of subsidy was inevitable, made a strategic decision in 2021 to invest in converting standard petrol vehicles to Liquefied Petroleum Gas (LPG) Autogas. We converted several standardised vehicles (Toyota Corollas, which were popular with ride hailing services like #Uber and #Bolt) to investigate the competitiveness of LPG Autogas over subsidised and non-subsidised PMS on a Naira per kilometre metric.  We evaluated two OEMs and deployed the converted fleet of Corollas in groups (urban and inter-state).  Over a 12-month study period, Asiko determined that for all groups:

  • Autogas is competitive against non-subsidised petrol;
  • Vehicles running on LPG Autogas can save up to 30% on fuel costs (more on Autogas Natural Gas).
Autogas by Asiko Power

In addition to Autogas LPG, there is also Autogas CNG. There is enormous potential in this area as well, and Asiko’s early investment in CNG truck heads has proven economically viable against equivalent diesel units in our fleet, with cost savings of over 50%.

Autogas by Asiko Power

What lies ahead – Opportunities and Possibilities

With the end of the subsidy era, now is the time to intensify our collective efforts to revolutionise the energy landscape by turning our attention to gas. In addition to being a cleaner, more reliable and eco-friendlier energy source, it proves now to be more pocket friendly than gasoline based on today’s market realities. Adopting Autogas (LPG or NG) for transportation is a win-win for the Nigerian government and people.

The time to move to Autogas (LPG or NG) is now!