Nigerians Turn to Compressed Natural Gas as Petrol Prices Soar: A Clean Energy Shift

With rising petrol prices pushing Nigerians to seek alternatives, many are now turning to Compressed Natural Gas (CNG) as a more affordable and environmentally friendly option. Unlike petrol, which is derived from crude oil, CNG is made by compressing natural gas, primarily methane, into a liquid form. It is safer, cleaner, and less expensive, making it an increasingly popular choice for Nigerian drivers facing skyrocketing fuel costs. Since the fuel subsidy rollback last year, CNG has gained traction as a viable alternative for both private and commercial vehicles.

The dramatic increase in petrol prices in Nigeria has prompted many car owners to seek alternatives, and for some, that means converting their vehicles to run on Compressed Natural Gas (CNG). Since the removal of fuel subsidies in 2023, petrol prices have surged fivefold, causing considerable strain on households and businesses alike. For many, CNG offers a more affordable solution and helps mitigate the financial pressure caused by rising fuel costs.

At an NIPCO Plc station on the outskirts of Abuja, the demand for CNG vehicle retrofitting has skyrocketed. The station has even set up a dedicated workshop where mechanics retrofit cars to run on CNG, installing cylinders and fuel injection systems. “We are booked until the end of January at least,” said Chris Uche, the technician leading the conversion efforts. “There are so many cars waiting to be converted.”

The shift to CNG represents Nigeria’s broader push to reduce its dependence on crude oil and harness its largely untapped natural gas reserves. The country boasts 200 trillion cubic feet of proven gas reserves, much of which is either flared or re-injected into wells, representing an underutilized resource.

To encourage this transition, the Nigerian government has introduced various incentives. Gas companies are receiving incentives, taxes and tariffs have been waived for CNG equipment, and discounts are available for taxis and commercial drivers. Additionally, a 10 billion naira ($6 million) credit facility has been established to help private car owners afford the conversion.

Toyin Subair, vice-chairman of a presidential committee on CNG, explained that the initiative aims to “enhance Nigeria’s energy security, lower transportation costs, and reduce carbon emissions.” The committee’s goal is to convert 1 million vehicles to CNG by 2027, with an interim target of converting 100,000 commercial vehicles by the end of 2024.

This goal, while modest in comparison to Egypt’s 500,000 CNG vehicles, represents a significant step towards cleaner energy for Nigeria, Africa’s top oil producer. The conversion process itself involves installing a high-pressure gas tank, pressure regulator, and injectors into vehicles. When CNG is injected into the engine, it is ignited by the car’s spark plugs, much like petrol in a conventional engine.

Commercial vehicle drivers, particularly those operating rideshare platforms like Uber and Bolt, have been quick to adopt CNG. These vehicles, often older models like Toyota Corollas, Honda Civics, and Peugeot 206s, are now being retrofitted to run on CNG, which is priced at 230 naira per litre—roughly one-fifth of the cost of petrol. Some drivers have reported a more than 400% increase in monthly profits due to the switch.

One such driver, Clement Sunday, who operates a 2002 Peugeot 206 on both petrol and CNG, shared his experience. “The only disadvantage it has cost me is the space in the boot. Passengers with luggage have proved to be an issue,” said Sunday. While the CNG tank reduces the boot space by a third, the car can travel 150 kilometres on a single 3,500 naira fill. He spent 800,000 naira on the conversion, but with government subsidies, the cost was reduced by a third. He claims to have already recouped his investment.

Though CNG has been in use for years in the trucking industry, it is now gaining momentum in personal vehicles. Nigerian billionaire Aliko Dangote, for example, uses CNG for his fleet of tankers, which travel the 700-kilometre route between Abuja and Lagos.

In addition to helping reduce Nigeria’s reliance on imported refined petroleum, CNG has the potential to reduce the country’s foreign exchange strain, as oil imports are paid for in dollars. However, the growth of CNG infrastructure remains a work in progress. While gas is produced in southern Nigeria by major oil companies like Shell and TotalEnergies, the distribution to filling stations nationwide remains limited, especially outside major urban centres like Abuja and Lagos. “We have to drive for two or three hours to find a station,” said Sunday, noting that longer queues are now becoming common.

Despite the government’s efforts, many gas distribution firms are hesitant to enter the market. The retail cost of CNG for cars remains unprofitable due to price regulation. Sumeet Singh, CEO of Powergas Africa, explained, “It is like replacing one subsidy with another, but we see the market settling at 50%–60% of the price of petrol and diesel.” Currently, most CNG distributors are focusing on industrial uses, where prices are unregulated.

To further support the CNG transition, the Nigerian government has allocated $450 million for investment in CNG infrastructure. More than 90 conversion centres are operating across the country, with an additional 88 smaller stations under development. Mobile refuelling units are also being introduced, capable of refuelling up to 40 vehicles per hour.

Nevertheless, safety concerns remain a significant hurdle. CNG, unlike petrol, is sensitive to temperature changes and can be dangerous if not handled properly. A recent explosion in Benin, which injured three people, further exacerbated safety fears. The government has responded by denying claims that the explosion was caused by a CNG vehicle, stating that the car involved had been illegally modified.

As Nigeria continues its push toward cleaner energy and more affordable transportation, the shift to Compressed Natural Gas offers a promising solution to rising fuel prices. While challenges remain in terms of infrastructure, safety, and distribution, the government’s incentives and ambitious goals provide a hopeful outlook for the future of CNG in Nigeria. The success of this initiative could serve as a model for other African nations seeking to reduce their carbon footprints and promote energy independence.