Economic Analysis of Utilising Compressed Natural Gas (CNG) as Vehicular Fuel in Nigeria

Abstract

Economic analysis of the use of compressed natural gas (CNG) for powering automobiles was presented. The data for costs of constructing and running CNG-powered vehicles were obtained for the study. Economic analysis of running the CNG-powered vehicles was performed. The initial costs of project and operating costs amounted to N3.71million and N1.31million for CNG respectively. The net revenue for CNG is N2.55 million. Figures were used to determine the pay-out of the project which is 1.45 years. The Net Present Value (NPV) and other parameters that make up the project economics were estimated for CNG. The NPV for CNG at an expected rate of return of 10% is N15.7 million. The summary of the result of the calculations of all the parameters examined for CNG was also presented. From the whole analysis done it is easily seen that using CNG for powering vehicles is economically viable.