FG, lenders partner to crash transport costs with CNG credit scheme

The Presidential Compressed Natural Gas Initiative, in collaboration with key financial partners, is making a significant move to alleviate the financial burden on Nigerian transport operators. The core of this initiative lies in tackling the prohibitive cost of converting vehicles to Compressed Natural Gas (CNG), a barrier that has long hindered the adoption of this cheaper and more environmentally friendly fuel source.

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This is a very significant partnership. What we are doing here is to ask a simple question: what is the barrier for Nigerians to switch to CNG? And the answer is clear, it is the cost of the conversion kit and installation.

By partnering with institutions like Moniepoint Microfinance Bank Limited and the Nigerian Consumer Credit Corporation, the initiative ensures that the cost of conversion kits and installation is not only reduced but also made payable over manageable periods. This approach directly addresses the affordability challenge, a critical factor for millions of low-income earners in the transport sector.

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We are reducing that barrier. Not only are we bringing down the cost, but we are also ensuring that these kits are supplied at cost. There is no profit margin built into it, because the goal is mass adoption and not profit-making.

The Chief Executive Officer of the initiative, Ismaeel Ahmed, emphasized that the goal is mass adoption, not profit. This sentiment underscores a government commitment to passing on the direct benefits of economic reforms, such as subsidy removal, to ordinary Nigerians. The projected savings for operators, with fuel costs potentially slashed by 60-70% and maintenance costs significantly reduced, paint a compelling picture of immediate financial relief.

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Instead of paying, for example, N100,000 upfront for conversion, you can now pay that amount over several months, six months, or even shorter, depending on your agreement with the financial institution. That flexibility is what makes this initiative powerful.

This scheme is a practical demonstration of how economic policies can be tailored to support the most vulnerable segments of the population. It moves beyond macroeconomic adjustments to deliver tangible improvements in the daily lives and financial well-being of commercial drivers, offering a much-needed respite from rising operational costs.

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If a keke rider spends about N40,000 weekly on petrol and another N10,000 weekly on maintenance, that is N50,000 every week. With CNG, that same rider could reduce fuel costs by about 60 to 70 per cent and cut maintenance from N10,000 weekly to about N10,000 monthly.