Our Correspondent
….Rising costs and fuel queues test Tinubu’s flagship alternative energy drive amid economic strain
Nigeria’s push to promote Compressed Natural Gas (CNG) as a cheaper and cleaner alternative to petrol has hit turbulence, as the Federal Government quietly raised the pump price from N230 to N450 per standard cubic metre (SCM) for trucks — nearly a 100 per cent increase — following the withdrawal of subsidy support.
Under the new pricing structure confirmed by marketers, commercial drivers and private cars continue to enjoy partial subsidies at N380/SCM, while haulage trucks, seen as non-essential for transport cost cushioning, now pay the full N450 rate.
The upward adjustment, attributed to a review by NNPC Gas Marketing Limited, comes barely a year after President Bola Tinubu removed petrol subsidies and launched the Presidential Compressed Natural Gas Initiative (PCNGI) as a central plank of his economic palliative. At the time, CNG was marketed as a stable, cheaper fuel to ease transport costs and attract investment into Nigeria’s underdeveloped gas economy.
Queues Return, Confidence Wavers
Despite government assurances, long queues stretching up to 1.5 kilometres have reappeared at refilling stations, raising concerns that motorists who spent up to N1.5 million converting their petrol vehicles may revert to petrol if CNG availability and pricing continue to falter.
Adeyemi Paul, a ride-hailing driver, voiced frustration:
“The government promised us CNG would be cheaper. But with these new prices and the queues, there’s little difference from petrol. Many may go back.”
Investors Courted, Consumers Strained
Industry insiders suggest the price hike may be part of a wider effort to attract private capital into gas infrastructure. A major CNG retailer, requesting anonymity, told The Punch:
“The government capped prices artificially low since 2023 to push adoption. Now prices may rise further to N500 or even N600/SCM to make the business attractive to investors.”
However, analysts warn that such moves risk eroding public trust in the very policy designed to cushion the pain of subsidy removal, especially with inflation at 30%, transport costs spiralling, and disposable incomes shrinking.
Progress vs. Perception
Government officials highlight the rapid growth of the CNG ecosystem — from just seven conversion centres in 2023 to 265 today, with over 100,000 vehicles converted and 10,000 direct jobs created. More than 60 refuelling stations are now operational, with 175 more under construction.
But critics argue that progress on paper is being undercut by poor execution on the ground. The mismatch between rising adoption and limited fuelling capacity has created bottlenecks, while the shifting subsidy policy raises doubts over affordability.
The Bigger Picture
Nigeria’s CNG programme was designed not only to lower transport costs but also to diversify energy use, reduce petrol import dependency, and position gas as the “transition fuel” for Africa’s largest economy. Yet, the latest price hike risks undercutting these goals at a time when the economy is grappling with record food inflation, currency depreciation, and subdued investor confidence.
As one analyst put it: “Without price stability and reliable infrastructure, CNG risks
Why CNG Prices Are Rising — and What It Means for Nigeria’s Economy
1. Subsidy Rollback
- When petrol subsidies were removed in 2023, government kept CNG prices artificially low to encourage adoption.
- Now, those subsidies are being scaled back — trucks pay full cost (N450/SCM), while cars and buses still receive partial support (N380/SCM).
2. Investor Incentives
- The higher price is partly designed to make the sector attractive for private investment.
- Industry insiders say rates may climb further to N500–N600/SCM to reflect true market value.
3. Infrastructure Gaps
- Despite over 100,000 conversions and 265 centres nationwide, supply still lags demand.
- Queues as long as 1.5km discourage motorists and weaken confidence in the programme.
4. Economic Strain
- Conversion costs (up to N1.5m per vehicle) already stretched consumers.
- With inflation above 30% and household incomes under pressure, rising CNG costs may push motorists back to petrol.
5. Big Picture
- Nigeria pitched CNG as its “transition fuel” to cut petrol imports and stabilise transport costs.
- But without price stability, reliable supply, and investor confidence, the initiative risks stalling — just when Nigerians need relief from soaring fuel prices.
