- Nigeria removed the fuel subsidy in 2023, promoting compressed natural gas (CNG) to reduce reliance on petrol and diesel.
- The country expanded CNG infrastructure, increasing conversion centres from 7 to 193 and attracting $440 million in private sector investment.
- By the end of 2024, Nigeria aims to reach 500 daily CNG vehicle conversions, supported by new refuelling stations and trained technicians.
In 2023, Nigeria began shifting towards sustainable energy, focusing on compressed natural gas (CNG) to reduce reliance on petrol and diesel. The government removed the fuel subsidy, which had long burdened the economy. This move aimed to lower fuel costs for Nigerians and utilise the country’s abundant natural gas resources.
The removal of the fuel subsidy allowed President Bola Ahmed Tinubu’s administration to invest in CNG. In late 2023, the government launched the Presidential CNG Initiative (PCMGI) to expand CNG use across Nigeria.
Alongside CNG promotion, the government also focused on boosting domestic oil production. By the end of 2024, several modular refineries, including EGTL, began producing diesel. By December 31, 2024, three refineries started producing petrol: Dangote, Port Harcourt, and Warri. This milestone positioned Nigeria to become an exporter of refined petroleum.
A closer look
CNG adoption surged in 2023. At the beginning of the year, Nigeria had only seven conversion centres. By December, the number grew to 193 centres across 17 states, up from a few in the South-West. The government collaborated with the private sector to expand this infrastructure. The private sector invested $440 million to develop motor and data stations.
Nigeria also saw progress in refuelling infrastructure. Over 50 motor stations are under development, and mini-LNG projects are underway to extend CNG access to rural areas. The Federal Ministry of Finance acquired over 5,900 electric and CNG-powered vehicles for free transportation during the holiday season.
Training was a critical component of the CNG push. The PCNGI trained over 1,100 technicians in 2023. Four training institutes partnered with the Nigerian Institute of Transport Technology and other bodies, ensuring a skilled workforce to support the growing CNG sector.
Despite the progress, challenges persist. The demand for CNG conversions exceeds supply, with over 1.5 million commercial vehicles in the country. Conversion centres manage only 400 conversions daily, but the target is 500 by the end of 2024.
By the end of 2023, about 431 CNG-powered vehicles were operational in states like Lagos, Oyo, Kwara, and Abuja. The government continues working with state governments and the private sector to expand the fleet. Lagos, for example, invested in CNG buses for public transportation.
The federal government spent around $100 million on CNG infrastructure, while the private sector invested $440 million. This public-private partnership has driven Nigeria’s adoption of CNG.
CNG-powered vehicles cost less to maintain than petrol or diesel vehicles. The cleaner fuel reduces wear and tear, lowering maintenance costs. However, the market still faces challenges with kit availability and the speed of conversions. In late 2023, the government acquired 70,000 additional kits to address these issues.
Although conversion centres face capacity constraints, the number of conversions is increasing. The goal is to reach 500 daily conversions by the end of 2024. Nigeria’s efforts to expand CNG infrastructure and human capacity lay a strong foundation for a more sustainable energy future.
With continued investment and expansion, Nigeria is making significant strides toward energy security and sustainability. The progress made in 2023 sets the stage for even more outstanding achievements in 2024 and beyond.