For compressed pure fuel (CNG) to turn out to be as extensively accessible as petrol and diesel throughout Nigeria, consultants recommend that retail costs could must rise to round N520 per commonplace cubic metre (SCM), guaranteeing industrial viability whereas nonetheless providing important financial savings to drivers and passengers.
They argue that present costs, whereas cheaper than petrol and diesel, will not be enough to draw large-scale personal funding wanted to develop refueling infrastructure nationwide and make CNG reliably accessible for on a regular basis use.
Two years after the Federal Authorities launched its push for CNG following the removing of gasoline subsidies, adoption stays beneath expectations.
Throughout the nation, CNG costs presently vary from N230 to over N500 per SCM, in contrast with petrol at N830–N880 per liter and diesel above N1,000, highlighting the gasoline’s potential financial savings but in addition the challenges of restricted entry.
Early adopters have reported significant reductions in working prices, but restricted station availability and reliance on truck-based distribution proceed to hinder seamless entry.
As of January 2025, roughly 50,000 autos and vehicles function on CNG, far wanting the federal government’s purpose of 1 million by 2027, highlighting the challenges going through Nigeria’s CNG ambitions.
Nigeria’s CNG journey thus far
The push for CNG adoption gained momentum after the removing of gasoline subsidy by the Bola Tinubu administration in 2023, as rising gasoline costs created demand for a extra reasonably priced and sustainable vitality different.
The Presidential Compressed Pure Gasoline Initiative (PCNGI) was established to speed up nationwide adoption, offering free automobile conversion for industrial drivers affiliated with unions at accepted facilities. Transformed autos can function in hybrid mode, switching seamlessly between petrol, diesel, and CNG. Security options—together with bolstered cylinders, pressure-release valves, and automated shut-off sensors—guarantee safe operation.
States corresponding to Lagos, Ogun, Oyo, Kwara, Niger, Enugu, and Rivers complemented the federal effort by rolling out transformed buses, establishing refueling stations, and supporting automobile conversion facilities. Federal interventions included distributing CNG buses and hybrid autos to commerce unions, college students, and different key beneficiaries.
By mid-2025, daughter stations elevated from 20 to over 65, attracting greater than $450 million in funding, coaching over 2,500 technicians, and working throughout 21 states. Moreover, PCNGi signed a $27.3 million MoU with LNG Arete Ltd. in April 2025 to assemble a fuel plant in Northern Nigeria with a processing capability of seven million commonplace cubic ft per day (MMSCFD), geared toward addressing regional vitality gaps.
Drivers and passengers expertise financial savings, however challenges persist
For drivers who’ve adopted CNG, the monetary advantages are substantial. Abuja-based e-hailing driver Samuel Udedike, who transformed his automobile in October 2024, reported a greater than 50% discount in each day gasoline bills.
“I now pay N230 per SCM to refill my cylinder,” mentioned Abuja-based e-hailing driver Samuel Udedike, who transformed his automobile in October 2024. “For instance, with about N3,500 price of CNG I can cowl the day’s journeys that some colleagues cowl on petrol or diesel — which regularly prices them N20,000–N30,000.” he mentioned.
Lagos driver Soji Tope shared comparable experiences however famous restricted station availability as a problem.
“CNG is cheaper, however stations will not be as many as common filling stations. Even so, the financial savings make the inconvenience worthwhile,” he defined.
Passengers additionally take pleasure in decrease fares. Blessing Ogbebor, who travelled from Lagos to Warri in January 2025, paid N18,000 for a CNG-powered bus, in comparison with N25,000 or extra on petrol and diesel options.
Nonetheless, her journey included a 30-minute detour in Benin to refill, highlighting the logistical limits of present infrastructure.
These experiences replicate a twin actuality: CNG affords substantial financial savings, but infrastructure gaps stay a barrier to seamless utilization.
Clarification on CNG measurement and distance protection
To offer a clearer understanding of CNG utilization, BusinessTimes spoke to Joseph Oluwafemi, CNG coordinator at Autogig Worldwide Sources Restricted, who defined that CNG is bought in commonplace cubic metres (SCM), not in kilograms as usually misrepresented.
Based on him, it takes about 13 to fifteen SCM to fill a 65kg CNG cylinder, and a full cylinder can energy a automobile for roughly 100 kilometres beneath regular situations. He famous that elements corresponding to automobile kind, engine modification, fuel strain at shelling out stations, and engine situation affect the precise mileage, however on common, a 65kg Kind 1 CNG cylinder gives about 100km of protection.
For comparability, petrol or diesel autos require about 15 to 18 litres to cowl the identical 100 kilometres, beneath comparable situations.
Value comparability: CNG vs petrol and diesel
Utilizing present market costs, the associated fee comparability between fuels for overlaying 100 kilometer’s reveals a transparent hole. For CNG, on the decrease retail worth of N230 per commonplace cubic meter (SCM), a motorist would spend about N3,450, whereas on the greater finish of N500/SCM, the identical distance would value roughly N7,500.
In distinction, petrol priced between N830 and N880 per liter means motorists would spend between N12,450 and N14,940 at N830, or between N13,200 and N15,840 at N880, to journey the identical 100 kilometers, assuming a gasoline requirement of 15 to 18 liters. Diesel, at a median of N1,000 per liter, would value between N15,000 and N18,000 for a similar journey.
This breakdown reveals that CNG stays considerably cheaper than each petrol and diesel, even on the excessive retail worth of N500/SCM. On the cheaper price level of N230/SCM, the financial savings for motorists are much more substantial.
Replace on CNG pricing
Authorities sources instructed BusinessTimes that efficient September 1, 2025, the value of compressed pure fuel (CNG) for all classes of passenger autos was set at N380 per SCM in Abuja and Lagos.
For all different areas, the N380/SCM price had already been applied two months earlier.
This adjustment represents a rise from the earlier lowest retail worth of N230/SCM, narrowing the big selection between N230 and over N500 that motorists had been paying, relying on location and distribution prices.
Nigeria’s CNG infrastructure hole
Regardless of worth benefits, infrastructure limitations proceed to constrain adoption. As of January 2025, simply over 50 refueling stations have been operational nationwide, with roughly 150 extra deliberate by the top of 2025.
Costs fluctuate between N230 and N560 per SCM relying on proximity to pipelines and any regasification prices. Distribution stays closely reliant on vehicles shifting CNG from mom to daughter stations, resulting in uneven entry, greater prices for stations positioned farther from pipelines, and occasional provide delays. Queues stay widespread in a number of areas.
With solely 50,000 autos operating on CNG in opposition to the PCNGi goal of 1 million by 2027, the hole between present adoption and authorities objectives is substantial. But, autos working on CNG proceed to save lots of considerably in comparison with diesel at round N1,000 per liter and petrol at N830–N880 per liter, highlighting the gasoline’s potential if infrastructure challenges are addressed.
Specialists’ views on industrial viability
Specialists emphasize that long-term success depends upon making a commercially viable market that draws personal funding. Jide Pratt, COO of Aiona and Nation Supervisor at TradeGrid, mentioned:
“Industrial viability has to drive pricing. As extra stations are constructed, the provision hole will shrink, serving to to stability demand.”
He defined that present CNG costs vary from N330 to N560 per SCM relying on distance from pipelines, noting that N520 per SCM might maintain industrial funding whereas protecting gasoline cheaper than petrol and diesel.
Pratt additionally highlighted Nigeria’s 209 trillion commonplace cubic ft of confirmed fuel reserves as a powerful basis for scaling the sector.
Impartial transport researcher Tonami Playman raised considerations over Nigeria’s reliance on vehicles for distribution.
“A CNG truck can transport 9,000kg of fuel, whereas a tanker truck carries 33,000 litres of petrol. To maneuver the identical quantity of vitality, we would want 3.6 occasions extra vehicles, growing site visitors and accident dangers considerably,” he mentioned.
Playman additionally argued that assumptions round value financial savings should think about the decrease finish of CNG pricing.
“At N230 per SCM, which is the most cost effective price some drivers presently pay, the financial savings in comparison with petrol and diesel are extraordinarily excessive. Even when the value rises to round N407 per SCM, CNG nonetheless affords about 104% financial savings in comparison with petrol,” he defined.
He added that even with the deliberate rollout of 150 new stations by the top of 2025, assembly PCNGi’s formidable targets would stay troublesome until precedence is given to establishing extra pipeline-fed stations.
Each consultants agreed that balancing affordability with industrial viability is crucial for mass adoption.
Classes from India
Playman pointed to India’s CNG journey as a mannequin Nigeria might adapt. In 2017, India had simply 1,200 CNG stations nationwide. By mid-2025, that determine had grown to about 8,200—a median of 875 new stations per 12 months—with the steepest enlargement in 2021 and 2023.
India’s progress was pushed by the Metropolis Gasoline Distribution (CGD) initiative, which granted personal corporations unique licenses to develop and function networks in designated zones.
These licenses got here with strict targets, and failure to ship might result in the lack of exclusivity. The Petroleum and Pure Gasoline Regulatory Board (PNGRB) additionally retained the correct to revoke contracts if corporations fell wanting their agreed Minimal Work Programme (MWP). This framework ensured regular, accountable development throughout the nation.
The CGD strategy additionally solved the logistics hurdle Nigeria is presently going through. In India, most CNG stations are related to pipelines, enabling smoother, safer, and extra predictable provide. Nigeria, in contrast, plans to truck CNG to almost all upcoming stations—a system that will increase street congestion and accident dangers.
On pricing, India managed to strike a stability between affordability and profitability. Home pure fuel, which provides about half of CNG feedstock, is priced at $6.5 per MMBTU, whereas imported LNG averages $12 per MMBTU. With 24kg of CNG per MMBTU, the enter value works out to roughly $0.38 per kg. In Delhi, retail costs are set at about double that value, which permits personal operators to get better investments whereas nonetheless protecting CNG round 25% cheaper than petrol.
Based on Playman, Nigeria may benefit from adopting an analogous framework: robust regulatory oversight, enforceable rollout targets, pipeline-based provide, and cost-reflective pricing.
Collectively, these steps might construct driver confidence in station availability, speed up adoption, and scale back reliance on dangerous truck distribution.
In Nigeria, the Nigerian Midstream & Downstream Petroleum Regulatory Authority (NMDPRA) serves because the equal of India’s PNGRB.
Outlook
Wanting forward, operators count on CNG costs to settle round N520 per SCM to make sure industrial viability, whilst the federal government pushes for affordability.
- Adoption has lagged preliminary projections, however Nigeria can study from India, the place strict enlargement targets and heavy funding in pipelines helped make CNG a mainstream gasoline.
- CNG’s pricing edge stays clear. It presently sells between N230 and N500/SCM, in comparison with petrol at N830–N880 per litre and diesel a bit above N1,000 per litre.
- Even on the proposed benchmark of N520/SCM, consultants say CNG would nonetheless be cheaper and extra enticing than petrol or diesel, making it essentially the most aggressive choice if infrastructure challenges are addressed.
They warning, nevertheless, that with out prioritizing pipeline-fed stations over truck-based distribution, scaling nationwide entry might be troublesome.
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