This move, driven by the Presidential Compressed Natural Gas Initiative (PCNGi), aligns with the country’s long-term objectives to phase out costly fuel subsidies and accelerate its transition toward cleaner energy solutions. It positions CNG as a vital alternative to petrol, addressing both the energy crisis and environmental concerns by leveraging the abundant natural gas resources in Nigeria.
Addressing Market Challenges and Ensuring Fair Pricing
At the launch event in Abuja, Michael Oluwagbemi, Programme Director of the PCNGi, explained that the new framework would regulate the burgeoning autogas market and curb any potential abuse of the government’s pricing advantage. He emphasized that without a proper regulatory structure, there could be a risk of cheaper gas intended for vehicles being diverted for use in power generation or industrial purposes.
“The new pricing structure, approved earlier in 2024 by the Chief Executive of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), ensures that CNG for autogas remains priced lower than gas used for power generation or industrial purposes. This makes it an affordable and strategic fuel for mobility,” said Oluwagbemi.
By implementing this concessionary pricing framework, the government aims to create an orderly and transparent marketplace for CNG. It will allow stakeholders, including gas suppliers, refuelling station operators, and vehicle owners, to engage in the market in a way that is sustainable and fair.
Expanding CNG Infrastructure and Adoption
In the last year, Nigeria has witnessed a rapid expansion of its CNG infrastructure. The country now boasts over 65 operational CNG refuelling stations, a significant increase from just 20 stations previously. More than 28 additional stations are expected to open soon, further enhancing access to CNG for motorists across the nation.
“Just this week, we inaugurated two new BOVAS CNG refuelling stations in Ibadan. Additionally, Dangote has announced plans to expand its network with 100 new CNG distribution outlets. These developments signal strong private-sector investment in the CNG ecosystem,” Oluwagbemi added.
The adoption of CNG-powered vehicles has also surged. From a modest 4,000 vehicles—largely concentrated in Edo State—the number of gas-powered vehicles has soared to over 50,000 nationwide. This number is projected to rise to between 125,000 and 200,000 vehicles by the end of 2025, with the government targeting one million CNG vehicles by 2027.
“The increasing demand for CNG is evident in the long queues at refuelling stations in cities like Abuja. It’s a welcome challenge, and with the right incentives like the concessionary pricing framework, we are confident that private investments will accelerate the adoption of CNG vehicles,” Oluwagbemi explained.
Strengthening Supply and Regulatory Oversight
Chijioke Uzoho, Managing Director of the Gas Aggregation Company of Nigeria (GACN), highlighted that the new framework would enforce both regulatory and commercial discipline in the CNG market. “This framework will ensure that every molecule of gas supplied is accounted for, and the agreed-upon pricing structure is adhered to throughout the value chain,” Uzoho stated.
To meet the growing demand for CNG, GACN has secured an additional 20 million standard cubic feet per day (mmscf/d) of gas, supplementing its existing 20 mmscf/d supply. Furthermore, high-capacity CNG trailers will be deployed to transport gas from major supply stations to regional refuelling hubs, ensuring that supply meets demand as the CNG ecosystem continues to grow.
Omolara Obileye, Business Development and Strategy Coordinator for PCNGi, shared that the initiative has already attracted over $500 million in private investments and trained more than 2,500 technicians to support the conversion of vehicles to CNG. She also revealed that the CNG network is now operational in 21 states, with plans to expand into 10 more in the near future.
“This growth is not only reducing transport costs but also helping to lower the cost of governance while boosting state revenues through the increased use of domestic gas,” Obileye said.
A Step Toward National Transformation
The Concessionary Autogas Supply and Pricing Framework is just one part of the broader strategy under the Presidential Compressed Natural Gas Initiative. This initiative is designed to reduce Nigeria’s dependence on expensive imported petrol, cut emissions, and drive industrial growth by optimizing the use of the country’s natural gas resources.
By supporting the development of a robust CNG infrastructure and market, Nigeria is positioning itself as a leader in the global shift towards sustainable and clean energy solutions. The successful implementation of this framework will have far-reaching impacts, not only in terms of environmental sustainability but also in stimulating economic growth and creating new jobs in the gas sector.
As the framework takes root, Nigeria is on course to achieve its clean energy goals, improve the affordability of transportation, and reduce its reliance on imported fuel—all while taking a major step toward a greener, more sustainable future.