There is disquiet in the auto industry over the implementation of the Compressed Natural Gas (CNG) initiative by the federal government with the planned roll-out of gas-powered vehicles by the presidential committee.
Daily Trust reports that the federal government, as part of measures to cushion the effects of fuel subsidy removal, provided N100 billion (part of the N500 billion palliative budget) to purchase 5,500 CNG vehicles (buses and tricycles), 100 electric buses and over 20,000 CNG conversion kits, alongside spurring the development of CNG refilling stations and electric charging stations nationwide.
Last month, presidential aide, Bayo Onanuga, said the committee driving the initiative is set to deliver on President Bola Ahmed Tinubu’s vision and promise by delivering the first batch of the palliative.
Onanuga, in a statement on Sunday, April 21, announced that the vehicles and 20,000 CNG conversion kits, worth about N100 billion, were procured as part of the many intervention programmes.
He stated that the PCNGI committee’s plan to deploy “CNG buses and tricycles and the vision to get at least one million natural gas-driven vehicles on Nigerian roads by 2027, will mark a major energy transition in our country’s transportation industry.”
H said with many vehicles, including trucks and buses running on CNG, and electric vehicles infrastructure expanding, the use of more expensive diesel and PMS will gradually be phased out.
Four plants owned by JET Motors, Mikano Motors, Kojo Motors, and Brilliant EV “located in various parts of the country,” are involved in the assembly of the semi knocked down (SKD) components of the CNG buses.
However, some stakeholders and players in the industry have queried the rationale for selection of auto plants involved in the implementation even as they insisted that the semi-knocked down (SKD) option was counter-productive as it is tantamount to importing the vehicles fully built and “coupling” them locally.
Daily Trust reports that under the old Nigerian Automotive Industry Development Plan (NAIDP-2023), the country should have transitioned into Complete Knocked-Down (CKD).
An auto industry stakeholder, Dr David Obi, said years after vehicle plants like PAN Nigeria, Kaduna; ANAMMCO, Enugu; Volkswagen in Lagos and lately, Innoson Vehicle Manufacturing Company Ltd (IVM) in Nnewi, took giant strides in CKD mode of auto manufacturing, Nigeria should not be talking about SKD again.
He said, “Are we moving forward or going backwards? If we did not do it before, it would have been understandable. But, these companies did CKD production years ago and I supplied chemicals and sealants to some of them. So, why are we going back to SKD?”
Obi, a former chairman of the auto group of the Manufacturers Association of Nigeria (MAN), argued against the production of the 6,500 units of vehicles scheduled for delivery this year and the total of one million for production between now and 2027, based on SKD.
A tricycle producer and founder of Lafbart Innovations and Consulting Ltd, Mr. Femi Olafunmiloye said, “Importing SKD tricycles, for example where local CKD capabilities exist, deprives the economy of maximum local participation and knowledge transfer. Going the CKD way assures of at least 35 per cent local content input. This further creates local component market in the country.”
The Chairman of Innoson Vehicle Manufacturing Co Ltd, Dr Innocent Chukwuma, said his company, which is a member of NAMA, did not know when the bid process opened or when it closed for the supply of the vehicles.
Daily Trust reports that Innoson has already commenced production of CNG vehicles and has opened a new plant specifically for the production of gas-powered vehicles in Nnewi.
Chukwuma asked, “Is there anybody in this country who does not know that Innoson is so far the only auto manufacturer in this country that has been doing CKD production of CNG buses of various sizes for about two years now? So, why was it that when it was time to bid for the contract, nobody remembered us. Let them tell Nigerians the truth.”
Also speaking, Head of Communications at Innoson Vehicles, Mr. Cornel Osigwe, said at various times the Nnewi plant has demonstrated the capacity to produce CNG-powered vehicles.
He said, “Innoson commenced the manufacture of CNG buses long before the politics of oil subsidy removal started, And that is why I wonder why we were totally excluded from the entire bid process.
“We at Innoson have been manufacturing various models of CNG buses for over two years now. We made history by becoming the first, and so far the only manufacturer of CNG/LNG-powered vehicles in Nigeria, for which we have earned many recognitions, including awards from The Sun Publishing, Silverbird and the Nigeria Auto Journalists Association (NAJA), all in 2023.”
