For many Nigerians, the development is a fresh blow to household budgets already strained by high petrol and diesel costs.

Motorists and Transport Operators React

At a CNG refilling station in Lagos, commercial driver Ibrahim Yusuf expressed frustration:

“We switched to CNG because it was affordable after petrol subsidy was removed. Now at ₦450, it’s no longer the relief we hoped for.”

Transport unions are warning that fare adjustments may be inevitable as operators struggle with rising operating costs, a situation that could further fuel inflation in food and essential goods.

Why the Price Jumped

According to industry experts, the spike in CNG prices is driven by several key factors:

Subsidy Removal: Government’s withdrawal of support has exposed consumers to full market pricing.

Rising Distribution Costs: Inadequate infrastructure and high logistics expenses for transporting gas have pushed prices upward.

Exchange Rate Pressures: The weaker naira continues to inflate the cost of equipment and technology used in gas processing and distribution.

Growing Demand: With thousands of vehicles converting from petrol to CNG, demand has quickly outpaced supply.

Government’s Position

Officials say the subsidy removal is part of broader reforms to reduce fiscal pressure and encourage private investment in the gas value chain.

The Presidential CNG Initiative (PCNGI) has promised to accelerate the rollout of new refilling stations and conversion workshops nationwide to ease supply constraints and stabilize prices.

Energy policy analyst Dr. Amina Adediran noted:

“In the short term, consumers will feel the pinch, but if government delivers on infrastructure expansion, CNG could still become a cheaper and cleaner alternative to petrol.”

What Lies Ahead

As CNG prices climb, Nigerians brace for higher transport fares and ripple effects across the economy. Analysts warn that unless urgent investments are made in infrastructure and distribution, the government’s clean energy transition plan could lose public support.

For now, commuters and businesses must adjust to the new reality, where the promise of cheaper CNG fuel faces its toughest test yet.

Aiming to enhance the adoption of alternative fuel sources and reduce dependence on petrol and diesel, Prince Adeleke, the CEO of Adeayworld Energy, revealed that the company has already secured a deal with Zhejiang Sinray Electronics Co. Ltd, a leading Chinese manufacturer of CNG kits. 

He assured that the kits would meet international standards and have been certified by the Standards Organisation of Nigeria (SON) after rigorous evaluation.

“Adeayworld Energy Limited has since signed a partnership with Zhejiang Sinray Electronics Co. Ltd, one of the leading manufacturers of CNG kits in China. The aim is to ensure that kits of international standard are manufactured and distributed across Nigeria. The Chinese company and its kits have also been approved by the Standard Organisation of Nigeria (SON) in line with the International Standard Organisation (ISO) after rigorous assessment,” Adeleke stated.

The collaboration aligns with the federal government’s Presidential Initiative on CNG (P-ICNG), which seeks to promote cleaner energy sources and lessen the financial burden of fuel costs on Nigerians. With the increase in the availability of CNG kits, the initiative aims to enhance fuel efficiency, support economic diversification, and reduce carbon emissions.

According to Khalil Halilu, executive vice-chairman of NASENI, the partnership with Adeayworld Energy Limited is a big step in expanding Nigeria’s energy infrastructure. He noted the economic and environmental benefits of transitioning to CNG, describing it as a practical and necessary solution in the country’s energy sector.

“The partnership with NASENI will significantly scale the adoption of CNG technology in Nigeria. It will not only enhance the profitability of participating businesses but contribute to the success of the presidential initiative on CNG,” Halilu said.

Beyond its ability to boost the economy, this initiative is expected to create jobs, improve energy security, and make CNG more accessible and affordable for businesses and individual consumers. 

The introduction of locally manufactured CNG kits will also reduce the cost of vehicle conversions, making it easier for transport operators to switch from petrol and diesel to natural gas.

Earlier this year, the government announced plans to collaborate with private companies to establish a CNG kit manufacturing hub in Ajaokuta, Kogi State. Again, the Nigerian National Petroleum Company Limited (NNPC Ltd.) and its private sector partners recently launched the construction of five mini-gas plants, which will collectively supply 97 million standard cubic feet of gas per day. 

These are all part of the Gas Revolution Agenda (GRA), aimed at making Nigeria a leading company in the natural gas sector.

The explosion, which took place on the Karu Bridge, located between Kugbo and Nyanya in the Federal Capital Territory (FCT), left several people dead and many others injured. 

While acknowledging reports that a bi-fuel petrol tanker was involved, the PCNG Initiative urged the public to refrain from speculation until a full investigation determines the exact cause.

“Preliminary accounts indicate a possible brake system failure leading to the explosion of the petrol storage tank, but it is crucial to avoid speculation until all facts are established,” the statement read.

Authorities, including the FCT Emergency Management Agency (FEMA) and the Federal Fire Service, have launched an inquiry. Teams from FEMA, the Nigeria Police Force, and the National Emergency Management Agency (NEMA) were on the scene all night, working to control the blaze and manage the fallout.

Again, the PCNG Initiative has reaffirmed its focus on promoting compressed natural gas (CNG) as a cleaner and safer energy alternative. It stressed the need for strict safety regulations and pledged to work with stakeholders to prevent similar disasters.

While the exact number of casualties is not known, eyewitnesses described a chaotic scene, with thick black smoke filling the sky and panicked commuters fleeing for safety. Further updates are expected as investigations progress.

This was revealed by Farouk Ahmed, the CEO of Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), while he was speaking at the inaugural Petroleum Industry Stakeholders’ Forum, organized by the Ministry of Petroleum Resources in Abuja recently.

Private sector players like Atlas Copco, a technology manufacturing company, are instrumental to this increased capacity.

While speaking to the role of CNG in transforming Nigeria’s energy situation, Olusola Aluko, the general manager of Atlas Copco Nigeria, said,

“The increased capacity for CNG conversion is a shining example of the impact that can be achieved when government, industry, and technology leaders come together to address our nation’s most pressing energy challenges.”

He further stated that,

“At Atlas Copco, we’re proud to be playing a vital role in expanding CNG access across Nigeria. Our cutting-edge technologies and solutions are helping to drive the growth of the CNG market, making it more efficient, sustainable, and accessible to businesses and individuals alike. As a partner in Nigeria’s energy transformation, we’re committed to delivering innovative solutions that support the country’s transition to cleaner energy sources and help shape a brighter energy future for generations to come.”

The demand for Compressed Natural Gas (CNG) in Nigeria has surged significantly in the past two years, driven by fluctuating fuel prices, rising environmental concerns, and government initiatives promoting cleaner energy sources. As industries and businesses seek cost-effective alternatives to diesel and petrol, CNG has emerged as a leading solution, reshaping the country’s energy landscape.

While there has been an increase in the adoption of the technology, some challenges still exist around the adoption in Nigeria, and they include; limited gas compression facilities, inadequate storage systems, and sparse fueling stations. Experts argue that substantial investments in these areas are critical to sustaining growth.

A recent report by the Nigerian Energy Transition Office emphasizes the need for expanding CNG refueling stations and enhancing distribution networks to meet future demands by 2030.

It also highlights the critical role of public-private partnerships in driving this growth and ensuring long-term sustainability.

The adoption of CNG is not only an economic imperative, but also an environmental one. As Nigeria continues to grapple with the challenges of climate change, the need for cleaner energy sources has become increasingly urgent.

CNG offers a viable alternative to traditional fossil fuels, producing significantly fewer greenhouse gas emissions and air pollutants.

Moreover, the use of CNG can help reduce Nigeria’s reliance on imported fuels, boosting energy security and saving billions of naira in foreign exchange.

As the country seeks to diversify its energy mix and reduce its carbon footprint, the growth of the CNG market is expected to play a critical role.

If Nigeria must meet its strategic energy goals, it must enlist the support of the private sector, as they hold crucial knowledge and financial power in speeding up the development of the sector.

These loans can be used to finance a variety of needs, including paying school fees, rent, maintenance costs, medical bills, car purchase & repairs, asset purchase, and more.

The program is available to civil servants and private-sector employees whose salaries are paid through Ecobank.

New customers can also benefit upon presentation of employer undertaking to pay subsequent salaries through Ecobank.

Starting this January, the initiative provides flexible repayment options and a streamlined loan application process.

CrediCorp, a Development Finance Institution (DFI) established by the Federal Government, is focused on enhancing access to consumer credit for Nigeria’s workforce. Under the partnership, CrediCorp will provide funds to Ecobank, for on-lending to qualified customers.

The arrangement covers personal loans, as well as asset financing for items like solar systems, home appliances, phones, laptops etc. and vehicle conversions to compressed natural gas (CNG).

Adeola Ogunyemi, head of Consumer Banking at Ecobank Nigeria, expressed excitement about the collaboration, emphasizing that it would provide salary earners, both in the public and private sectors, with better access to financial products.

She said,

“This collaboration is an excellent opportunity to serve our customers, and we believe it will improve the quality of life for many Nigerians. Eligible customers can use the loans to purchase electronics, solar systems, or CNG vehicle conversions, as well as for other essential expenses like school fees, rent, upkeep, medical bills, and car maintenance. We encourage working-class Nigerians to open an account with Ecobank to benefit from this initiative.”

The loans come with affordable interest rates, a two-year term, and a repayment plan that ensures equal monthly installments, including principal and interest, do not change throughout the life of the facility, regardless of the economic situation of the country.

Ecobank Nigeria is part of the Ecobank Group, a leading pan-African banking organization.

The bank provides a full range of financial services to individuals, businesses, and institutions through its network of over 240 branches and 35,000 Xpress Point agencies across Nigeria.

This was revealed in the Central Bank of Nigeria’s newly released Economic Report for the third quarter of 2024.

The report said inflation moderated during the quarter, reflecting the fall in the food component of the Consumer Price Index basket, and driven by the restrictive monetary policy stance.

Domestic crude oil production increased, following enhanced security measures around oil pipeline infrastructure in the Niger Delta region.

Despite persisting headwinds, CBN said the economy continued to expand in the third quarter of 2024.

The growth of 3.46 per cent recorded in Q32024, represented the third consecutive expansion year-to-date surpassing the 3.19 per cent and 2.54 per cent recorded in Q22024 and the corresponding quarter of 2023, respectively.

Growth was on account of continued efforts to improve the business environment, streamline cumbersome business processes, and deepen the quality of business infrastructure.

The 24-month window period opened for the banking sector re-capitalisation (according to their license category and authorisation) supported the robust growth in the services sector, particularly, the finance and insurance sub-sector, the report explained.

The continued drive of the government to improve crude oil production to a target of 2 million barrels per day by year-end of 2024, helped the oil sector to maintain positive growth for the fourth consecutive quarter.

Thus, the oil sector grew by 5.17 per cent (year-on-year) in Q32024, compared with a growth of 10.15 per cent in the preceding quarter, and contributed 0.28 percentage points to the overall increase in the period under review.

The performance was slower than the preceding quarter, owing to a drop in prices of Nigeria’s Bonny Light crude in the international market, to US$82.07/b from US$86.92/b in Q22024.

However, with the increase in crude oil production from 1.27mbpd in Q22024 to 1.33mbpd in Q32024, the sector maintained a positive contribution to overall growth.

The non-oil sector growth accelerated to 3.37 per cent in Q32024 compared with a growth rate of 2.80 per cent in the preceding quarter, contributing 3.18 percentage points to total growth. The expansion of the non-oil sector was driven by the performance of the financial & insurance, information & communication, crop production, trade, transportation & storage, and real estate sub-sectors.

In terms of sectoral performance, CBN said all the sectors, (agriculture, industry, and services) grew in Q32024.

The Services sector expanded at the fastest pace by 5.19 per cent in Q32024, compared with 3.79 per cent in Q22024 and 3.99 per cent in Q32023, remaining the most dominant sector and accounting for 53.58 per cent of aggregate Gross Domestic Product.

Within the services sector, the financial & insurance sub-sector grew by 30.83 per cent, compared with 28.79 and 28.21 per cent in the preceding and corresponding quarters of 2023, respectively. This performance was spurred by gains from the recapitalisation exercise that was announced by the CBN, according to the report.

Other factors such as profits from interest gains (following continued hikes in interest rates), consultancy fees, and ATM & transfer fees contributed to the growth of the sub-sector.

Also, given the financial sector’s ongoing digital transformation (including the significant growth of fintech companies, mobile banking, and digital payment systems), the information and communications subsector grew by 5.92 per cent (contributing 0.95pp to GDP growth).

The performance of the ICT sub-sector was further boosted by the ongoing demand for digital services like e-commerce and data/internet services, which helped to grow economic activity in the other sub-sectors like trade and real estate 0.65 and 0.68 per cent, respectively.

The transport and storage sub-sector grew by 12.15 per cent, compared with contractions of 13.53 and 35.85 per cent in the preceding and corresponding quarters of 2023, respectively.

The growth was driven by the increase in road transport owing to improved security conditions and substitution from air transport (due to higher airfares).

Also, sustained investments in road infrastructure, as well as investments in alternative sources of energy (CNG) for road transport contributed to the uptick in the sub-sector.

The agriculture sector grew modestly by 1.14 per cent, compared with 1.41 and 1.30 per cent in the preceding and corresponding quarters of 2023, respectively.

The growth was driven by favourable weather conditions and increased harvests of some staples.

Crop production grew by 1.18 per cent, compared with1.65 per cent in Q22024, while the forestry and livestock sub-sectors grew by 2.23 and 1.03 per cent, respectively, compared with a growth of 2.77 per cent and a contraction of 1.71 per cent in Q22024.

The fishing sub-sector, however, contracted by 1.91 per cent, against a growth of 0.38 per cent in the preceding quarter.

The industry sector maintained a positive trajectory, growing by 2.18 per cent in Q32024, compared with 3.53 and 0.46 per cent in Q22024 and Q32023, respectively.

This slower growth was reflected in the Industrial Production Index (IPI), which grew by 2.04 per cent (year-on-year) in Q32024, compared with 4.13 per cent in the preceding quarter.

Sustained efforts by the government, however, to improve crude oil production (to 1.33mbpd in Q32024 from 1.27 mbpd in Q22024), contributed to the sector’s growth outcome in the period under review.

The increased production was on account of improved security in the oil-producing region.

Modest performances were recorded in the mining & quarrying sub-sectors with a growth of 3.27 per cent compared with 7.79 per cent and a contraction of 1.96 per cent in the preceding and corresponding quarters of 2023, respectively.

The industry sector, less oil, grew by 0.87 per cent compared with 0.85 and 1.04 per cent in the preceding and corresponding quarters of 2023, respectively.

Growth reflected the sustained gains in water supply (9.78%), sewerage waste management (3.23%); milder expansions in electricity, construction (2.91%), and manufacturing (0.92%) activities, with growth rates, respectively.

However, the marked contraction was observed in the mining and quarrying subsector which shrunk by 61.36 per cent compared with 45.89 and 29.01 per cent contractions in the preceding and corresponding quarters of 2023 respectively.

Kyari disclosed this at the opening ceremony of the 42nd Nigeria Association of Petroleum Explorationists (NAPE) Annual International Conference and Exhibition themed: “Resolving the Nigeria Energy Trilemma: Energy Security, Sustainable Growth and Affordability” in Lagos, on Monday.

The GCEO, who was Special Guest of Honour at the occasion, also said the company has perfected plans to deliver 12 Compressed Natural Gas (CNG) Mother Stations and Mini LNG Plants soon, as part of efforts to boost the existing 1.6bscf of gas supply for domestic market.

“The energy trilemma is a profound responsibility we shoulder as stewards of Nigeria’s energy future. NNPC Ltd is working tirelessly to improve our supply chain, develop new refining capacities and expand our retail network,” Kyari stated.

According to him, NNPC Ltd is set to collaborate with private refineries to ensure affordable and sustainable petroleum products supply; Naira-for-crude transactions in order to stabilize the local currency and regulate forex markets.

This, he added, will bring about expansion of gas infrastructure such as the Ajaokuta-Kaduna-Kano (AKK) Gas Pipeline and the Obiafu-Obrikom-Oben (OB3) Gas Pipelines projects and the development of cleaner energy options, such as Liquiefied Natural Gas (LNG) and Compressed Natural Gas (CNG).

“Currently, NNPC Ltd supplies over 1.6 billion standard cubic feet (bscf) of gas per day to the domestic market through infrastructure we either own outright or operate with partners. This distribution network is entirely managed on NNPC Ltd.’s balance sheet,” Kyari added.

Explaining that the Company is expanding its efforts to enhance domestic energy access, the NNPC Ltd helmsman said the next 3-6 months will see significant project launches, including CNG mother stations, mini-LNG plants, and additional CNG daughter stations.

Kyari, who commended President Tinubu’s efforts to relieve forex pressures by reducing fuel imports and strengthening Nigeria’s local refining capacity,  emphasized the need for collaboration, innovation, and technology in achieving Nigeria’s energy goals.

“Resolving the energy trilemma requires bold ideas, shared knowledge, and collective determination. Together, let us build a Nigeria where energy is secure, sustainable, and affordable for all.”

On NNPC Ltd’s mandate to guarantee energy security as stipulated by the Petroleum Industry Act, Kyari said the Company has fostered partnerships and investments aimed at enhancing local production and generating revenue for economic diversification.

Reacting to claims that NNPC Ltd is sabotaging the efforts of domestic refineries, Kyari said the NNPC Ltd is part-owners of the Dangote Refinery, stressed further that such investment is a strategic move aimed at strengthening domestic fuel supply.

This international event brings together stakeholders from across the world who drive thought leadership insights on how to encourage collaboration, catalyse actionable solutions, and urge governments, businesses, and individuals to invest in climate-smart initiatives.

The climate-focused event was announced at last week’s Friday international press conference held at the prestigious Transcorp Hilton Abuja.

This marks a significant milestone in Africa’s journey towards a sustainable future.

A precursor to the upcoming Climate Action Africa Forum scheduled for June 17-19, 2024, at the Landmark Events Centre in Lagos, Nigeria, this press conference brought together leaders, experts, and stakeholders from across the globe.

The gathering’s main goal was to discuss the urgent need for sustainable development plans and climate-smart investments in Africa.

Framed by the theme “Green Economies, Brighter Futures: Innovating and Investing in Africa’s Climate-Smart Development,” the international press conference became a vibrant platform for insightful discussions, strategic collaborations, and impactful engagements.

It convened an esteemed gathering of leaders, experts, and stakeholders to explore solutions for Africa’s pressing environmental challenges.

The event kicked off with a welcome address by Grace Mbah, the executive director and Co-founder of Climate Action Africa,  who having announced the commencement of event registration as April 2nd, 2024, made the call for tech-driven solutions and innovations in the fields of emissions reduction, transportation, agriculture, energy, circularity and building and construction to apply to participate in the deal room.

Providing insights to attendees on how innovative approaches and collaborative action is at the heart of CAAF24, she extended an opportunity to like, minded organisations who would like to partner by hosting side events and finally, a call for volunteers from across the continent.

“It’s no news that the world stands at a critical juncture, where decisive action is imperative to mitigate the adverse impacts of climate change. Against this backdrop, CAAF24 serves as a pivotal platform for key stakeholders to engage in meaningful discourse, and forge collaborative pathways towards a greener, more sustainable future.

The essence of CAAF lies in its commitment to shaping a climate-resilient Africa through co-creation, innovation, and sustainable investment. Through this initiative, we aim to catalyse solutions that enhance the sustainability and prosperity of the continent’s natural resources, people, and economies,” Grace stated.

During the International Press Conference, distinguished speakers and thought leaders emphasised the urgent need for collective action in tackling Africa’s climate challenges.

They delved into critical topics like renewable energy, sustainable agriculture, biodiversity conservation, and climate finance, offering practical insights and inspiring initiatives.

Jummai Vandu, representing the National Council on Climate Change, expressed optimism about the initiative’s outcomes.

“Today’s discussions,” she said, “underscore the urgency of our collective efforts to combat climate change. The National Council believes working together is key to driving meaningful action and creating a more sustainable future for Africa and beyond.”

With the International Press Conference complete, the stage is set for CAAF24. Stakeholders will converge to translate ideas into action, forge partnerships, and drive progress towards a climate-smart Africa.

Mrs. Taiwo Fashipe, head of Media for the Presidential CNG Initiative (P-CNGi), echoed similar sentiments, stating:

“The theme of this year’s Climate Action Africa Forum aligns with our goals, vision, and mission at the Presidential CNG Initiative. We look forward to using this platform to advance interest in and investment in greener and cleaner energy sources like CNG.”

Standing at a crucial juncture in Africa’s quest for sustainable development, CAAF24, convened by Climate Action Africa in partnership with the National Council on Climate Change, Channels Media Group, and Founder Institute, emerges as a beacon.

It brings together the private and public sectors, guiding the continent towards a future marked by resilience, prosperity, and environmental stewardship.

The Senate through its Committee on Gas, led by Senator Jarigbe Jarigbe, urged the government of President Bola Tinubu to expeditiously present a 2023 Supplementary Budget to the National Assembly to kick start the Compressed Natural Gas project.

This request came barely 48 hours after President Bola Tinubu announced measures to cushion the pains of fuel subsidy removal on Nigerians.

The lawmakers insisted that the law was against extra-budgetary spending.

The committee’s chairman who commended Tinubu for the CNG initiative, however, warned that it would be illegal to spend taxpayers’ money or the money without approval by the National Assembly, and other projects in the gas value chain.

The senators also advised against extra-budgetary expenditure through Ways and Means,’ saying the legislature was ready to support and bring succour to the people.

Jarigbe commended Tinubu on his CNG revolution to power vehicles.

He said, “The noble initiative would ameliorate the hardship of the citizens. Also, the President needs to come up with a supplementary budget to enable the government to fund the gas value chain, including the provision for CNG infrastructure and CNG vehicles.”

He also stated that the workshops and training for CNG adoption would need to be funded.

“The President should not embark on extra-budgetary expenditure because it would be inconsistent with the provisions of the law.”

Jarigbe stated that the National Assembly, under the leadership of the Senate President, Senator Godswill Akpabio, was poised to support the lofty programmes of Tinubu.

He said a 2023 supplementary budget would be most appropriate, instead of the ‘Ways and Means’ approach of the previous administration, which had remained a major issue of contention in the Central Bank of Nigeria.

In his Independence speech, the President explained that he would ensure that the hardship of Nigerians was alleviated.

Tinubu had said, “A Nigeria where hunger, poverty and hardship are pushed into the shadows of an ever fading past.

“We have opened a new chapter in public transportation through the deployment of cheaper, safer CNG buses across the nation. These buses will operate at a fraction of current fuel prices, positively affecting transport fares.

“New CNG conversion kits will start coming in very soon as all hands are on deck to fast track the usually lengthy procurement process.”

He said his administration was also setting up training facilities and workshops across the nation to train and provide new opportunities for transport operators and entrepreneurs.

[Source]