Efforts to position Compressed Natural Gas (CNG) as a cost-effective alternative to petrol in Nigeria are facing significant obstacles.

Despite the federal government’s directive to sell CNG at a subsidized price of N200 per standard cubic meter—far cheaper than the over N1,000 per litre cost of Premium Motor Spirit (PMS)—the initiative is struggling due to inadequate infrastructure.

Currently, Nigeria has only about 50 operational CNG refuelling stations, primarily managed by NNPC Limited and NIPCO, leaving large parts of the country without access to this affordable fuel option. This shortage is a critical bottleneck in achieving widespread adoption of CNG.

IPMAN Calls for Government Intervention

The Independent Petroleum Marketers Association of Nigeria (IPMAN) has raised concerns over the high capital investment required to convert existing petrol stations into CNG refuelling points. Hammed Fashola, IPMAN’s National Vice President, emphasized that many independent marketers lack the financial capacity to make this transition.

Fashola suggested that the government establish a dedicated oil and gas financing institution to provide low-interest loans tailored to the industry. He noted that commercial bank loan rates are prohibitively high, making them unsuitable for funding such projects.

Cost-Effective Approach to CNG Expansion

Leveraging existing petrol station infrastructure to distribute CNG would significantly reduce costs compared to constructing entirely new facilities, according to Fashola. However, without sufficient funding, the expansion of CNG refuelling stations will remain sluggish. This delay discourages vehicle owners and fleet operators from switching to CNG, despite its lower cost.

Operational Challenges for CNG Users

The limited availability of CNG refuelling stations has led to long queues and delays for the few vehicle owners who have made the switch. Without a rapid increase in infrastructure, the adoption of CNG will likely remain limited, undermining the government’s efforts to promote it as a viable and affordable fuel alternative.

For Nigeria to successfully transition to CNG and reduce the nation’s dependence on costly petrol, robust government support and strategic financial solutions are crucial. Expanding CNG infrastructure can not only make transportation more affordable but also contribute to a greener, more sustainable energy future for the country.