CNG: Will transport fares really drop on October 1?

Last week, I went the lamentation way when I painted a picture of what Nigerians are going through as petrol prices rise in a manner that is eating deep into their already battered pockets.

One can imagine the plight of a worker leaving home early in Lagos, Abuja, Port Harcourt, Kano or any other city in the country. Before buying breakfast, paying school fees or contributing to household expenses, a significant part of the day’s income disappears into transportation.

Petrol sells for around N1,400 per litre in many places. Diesel prices have also risen sharply. Every increase at the pump travels rapidly through the economy, with transport fares rising and food and other essential commodities becoming more expensive.

Against this very dire situation, President Bola Tinubu gave Nigerians a ray of hope over the weekend when he declared that, following his August 27 meeting with the 36 state governors, Nigerians should begin experiencing measurable reductions in transportation costs from October 1, driven principally by Compressed Natural Gas and alternative-energy public transportation. What an Independence Day gift that would be for Nigerians!

CNG is natural gas compressed for use as vehicle fuel. Nigeria has enormous gas resources. It therefore makes a lot of sense that a gas-rich country should not remain almost completely dependent on expensive petrol and diesel to move its people. The government’s position is that if more vehicles switch from expensive petrol to cheaper CNG, transporters will spend less on fuel, and this will translate into lower fares for commuters.

That logic appears difficult to fault. But in reality, cheaper fuel does not automatically lead to cheaper fares. Somebody must ensure that the savings travel all the way from the CNG pump to the passenger’s pocket.

According to the Presidency, Nigeria now has more than 120,000 CNG-converted vehicles, over 400 certified conversion centres and more than 90 refuelling stations. Tinubu has also directed the deployment of an additional 500 CNG stations, ultimately taking the planned expansion to 1,000. Whether that scale is sufficient for Nigeria’s huge transport market is another issue entirely.

There is evidence that CNG can reduce fares. Tinubu cited examples that, to the best of my knowledge, have not been faulted. According to the Presidency, in Borno, CNG/electric public transport reportedly charges between N50 and N100 on routes where conventional operators charge between N300 and N600. In Oyo, CNG buses reportedly helped reduce the Lagos-Ibadan fare from about N8,000 to N3,200 during the initial deployment. Numerous other instances were cited.

But October 1 is not magic, and it is not far away. It will arrive next week, and nothing magical will happen to buses merely because the calendar changes. How many commercial vehicles have actually been converted? How many CNG buses will be on Nigerian roads? Where will they refuel? How many cities have sufficient refuelling stations? What happens in rural communities and smaller towns? The questions are many.

I ply the Lagos/Ogun ends of the Lagos-Ibadan Expressway daily, and I am familiar with the plight of drivers of CNG-powered vehicles and their passengers. On that stretch of road from the old Lagos Toll Gate to the Redemption City in Ogun State, and probably beyond, there appears to be just one CNG station, located opposite the MFM Prayer City. Any time I drive past that station and see the long queue of tricycles, cars, buses and trucks waiting to be served, I thank my stars that I do not drive a CNG-powered car.

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During an informal discussion recently, two of my neighbours told me that they deliberately avoid boarding CNG-powered commercial vehicles on that route because of their past experiences. According to them, apart from the long queues, passengers are usually asked to alight by the roadside before the vehicles are driven into the station to refuel. Having already paid their fares, the helpless passengers are left stranded until their drivers are lucky enough to get served. My neighbours said once they see a gas cylinder in a commercial vehicle, they avoid it like the plague.

That experience points to an obvious challenge: there is an urgent need for a drastic increase in the number and spread of CNG refuelling stations. The government wants measurable fare reductions from October 1, but the Presidency says the first batch of the 500 CNG stations already ordered is not expected until the end of October. Can Nigerians reasonably expect widespread cheaper transportation from October 1 when part of the infrastructure intended to support it will not arrive until later in the month?

Conversion costs are another issue. For an ordinary commercial driver struggling with vehicle maintenance, union dues, levies, feeding a family and perhaps loan repayments, conversion costs can be a significant barrier. I know the government has introduced financing arrangements that let motorists and fleet owners obtain credit for conversion rather than paying the full cost upfront. I, however, do not know how easy these facilities are to access. The truth is that if millions of commercial vehicles remain petrol-powered, CNG cannot significantly influence transport fares nationwide.

Another key question is whether transporters will willingly pass the savings on to passengers. Transport fares can rise immediately when petrol prices increase but prove much harder to reduce when operating costs fall. Considering the realities of our commercial transport system, I find it difficult to imagine that a driver at a bus stop will see his colleague with a petrol-powered vehicle charging N1,000 for a trip and willingly charge N300 for the same journey simply because his own vehicle is CNG-powered.

The President himself appears conscious of this problem. He specifically instructed governors to work with transport unions and commercial operators and, above all, ensure that savings from cheaper energy reach citizens through lower fares. But achieving that will not be as simple as it appears or sounds.

It also needs to be made clear that there is a difference between a CNG-driven transport system and a government-subsidised bus scheme. Both can help commuters, but they are not identical. If a state buys 100 buses and charges N100 where private buses charge N500, commuters fortunate enough to board those buses will benefit. But that does not necessarily mean the transport market has fundamentally changed.

The bigger achievement would be getting private commercial transport operators onto cheaper energy at sufficient scale for competition to force fares downward. That is how CNG can become a sustainable solution rather than another government palliative.

Government can announce 120,000 conversions or celebrate 400 conversion centres. While those numbers matter, they are means to an end, not the end itself. What the worker standing at a bus stop on October 1 will want to know is the fare, not the efforts being made to bring fare down. Nigerians do not ride statistics to work. They ride buses, taxis and tricycles.

The ultimate test of the CNG initiative will therefore not be how many vehicles the government says have been converted or how many stations it plans to build. It will be whether the Nigerian who paid N1,000 for a journey yesterday can make that same journey for considerably less tomorrow.

Tinubu has put October 1 on the calendar. Nigerians will be waiting at the bus stops.