Nigeria is investing N122 billion ($157 million) in a major push to integrate Compressed Natural Gas (CNG) into the country’s transportation sector, aiming to reduce the cost burden of rising fuel prices and the nation’s reliance on expensive diesel imports.
The initiative, led by the National Automotive Design and Development Council (NADDC), seeks to establish a nationwide CNG infrastructure, providing a cleaner, more affordable fuel option for vehicles across Nigeria.
With diesel prices having surged fourfold in the past two years, logistics and transportation companies have faced mounting financial pressures.
The director-general of the NADDC, Joseph Osanipin, made this disclosure at its 2024 end of year media briefing in Abuja.
Osanipin, who admitted that the current infrastructure could not fully support the demand for CNG, added that the N122 billion investment is to help bridge the gap.
“The infrastructure we have currently cannot fully support the demand for CNG. However, the federal government is working seriously on that.
“The rising cost of diesel is unsustainable for Nigerian businesses, particularly in logistics and transportation,” Osanipin said. “This investment will help build a robust CNG network, which will significantly lower the cost of fuel for vehicles, bringing relief to both businesses and consumers.”
He noted that the funding, released on September 30, 2024, is intended to close the infrastructure gap that has limited CNG adoption in Nigeria.
“On September 30, the government released N122 billion to assist investors and stakeholders across Nigeria’s geopolitical zones to provide the necessary infrastructure for CNG.
“A lot of investments are going into the provision of infrastructure to support gas. Once these projects are completed, we will begin to see the results in the near future.
“Companies like NIPCO, which have been in the gas business for years, have a head start, but many other stations are also building CNG facilities.
“CNG offers a tremendous cost-saving opportunity for the transportation sector,” Osanipin explained.
“A trip that costs N550,000 with diesel can now be completed for just N90,000 using CNG, achieving an 83 per cent reduction in costs.” The savings, he added, could lead to lower product prices and financial relief for consumers.
The DG emphasised that CNG adoption will provide a more stable, domestic fuel source, saving Nigeria billions of dollars annually in foreign exchange, while also reducing the environmental impact of diesel-powered vehicles.
“This investment will lower our carbon footprint, support economic resilience, and offer a cleaner, more cost-effective energy solution for vehicles.”
Osanipin noted that more companies are now recognising CNG as a viable alternative, with many that once overlooked its potential now actively investing to remain competitive.
“Partnerships are being forged, and infrastructure projects are progressing to ensure a steady supply of gas,” he said.
He further assured Nigerians that the government’s ongoing efforts to develop the necessary infrastructure would soon alleviate gas shortages and improve CNG accessibility across the country.
“The infrastructure will arrive, and when it does, the challenges with gas supply will be significantly minimised,” he added.
