CNG prices nearly double as government cuts subsidy

The cost of Compressed Natural Gas has almost doubled in recent weeks, rising from N230 to N450 per standard cubic metre following a government decision to reduce subsidies on the alternative fuel.

According to The Punch, retailers have revealed that while trucks now pay the full N450/SCM, private car owners and commercial drivers still get partial subsidies, paying N380/SCM to help keep transport fares stable.

The Punch also cited an anonymous official from the Presidential Compressed Natural Gas Initiative (PCNGI), confirming the new pricing structure. “The refuelling stations now sell at different prices depending on the type of vehicle. Trucks transporting goods pay higher, while buses that convey passengers and private cars buy at a reduced rate,” the source explained.

The PCNGI official said the initiative’s current focus has shifted towards expanding infrastructure to address chronic supply shortages that force converted vehicle owners to fall back on petrol.

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“Some vehicle owners have converted to CNG, but when gas is not available, they fall back on petrol. Our main drive now is to increase the number of refuelling stations nationwide,” he said.

A major CNG retailer confirmed that NNPC Gas Marketing Limited (NGML) implemented the new pricing, but warned that costs could rise even further to N500 or N600/SCM to attract private investors into the sector.

“The government had subsidised CNG to encourage usage, but the reality is that the difference between CNG and petrol is narrowing,” the retailer noted.

Vehicle owners who made significant investments to convert their cars are expressing mounting frustration over both rising costs and persistent supply problems.

“Some people spent up to N1.5 million to convert their vehicles to CNG. Now with the price increase and the queues, many may return to petrol,” said Adeyemi Paul, a ride-hailing driver.

The government launched its CNG initiative in 2023 following the removal of petrol subsidies, which pushed pump prices from N175 to N870 per litre. Officials promoted compressed natural gas as a more affordable alternative fuel option.

Since then, the programme has achieved notable growth. More than 100,000 vehicles have been converted to run on gas, a dramatic increase from fewer than 4,000 previously. The number of refuelling stations has expanded from 20 in late 2023 to 60 currently, with 175 more under development.

Conversion centres have grown from just 7 to 265 nationwide, creating over 10,000 jobs in the process.

However, the rising price of CNG and ongoing supply challenges now threaten to undermine public confidence in what was intended to be a long-term solution to Nigeria’s transport fuel costs.