By Milcah Tanimu
In response to the removal of fuel subsidies, Nigeria is devising a strategy to mitigate the effects by introducing a more affordable energy alternative. The administration is looking to compressed natural gas (CNG) as a viable substitute for premium motor spirit (PMS), commonly known as gasoline. The cost of CNG is projected to be around N250 per liter, according to the Presidency.
Ajuri Ngelale, the Special Advisor to the President on Media and Publicity, shared this development during a live appearance on the August 22, 2023 edition of the Business Morning show on Channels Television. Ngelale highlighted that President Tinubu’s “highly significant” Presidential Compressed Natural Gas Initiative includes a focus on reducing gas prices.
Ngelale explained that the initiative, overseen by Femi Gbajabiamila, Chief of Staff to the President, will introduce 11,500 new CNG-fueled vehicles, with a specific emphasis on mass transit systems across all states of the federation. The goal is to provide CNG-fueled buses to cater to lower-income individuals, consequently lowering the overall cost of transportation, which includes PMS-fueled buses, to an estimated N620 per liter on average.
He stated, “The average cost of CNG is now around N250 per liter. This will significantly impact the daily lives of ordinary Nigerians using mass transit for their work commutes, market trips, and other activities.”
Ngelale highlighted that the approach involves both the demand and supply sides of the CNG equation. The President negotiated a deal through the Nigerian National Petroleum Company Limited (NNPCL) with NIPCO to expand CNG infrastructure. The deal aims to establish 56 new CNG filling stations across all states within 16 months, with an additional 21 stations in the following nine months, and another 35 stations by April 2025.
Furthermore, to promote the adoption of CNG, there will be exemptions on customs duties and VAT for CNG conversion kits. This initiative aims to expedite and reduce the costs of converting vehicles to CNG, benefiting families across Nigeria.
President Bola Ahmed Tinubu recently launched the Presidential Compressed Natural Gas Initiative (PCNGI) as part of efforts to transform the nation’s transportation system. The initiative plans to introduce over 11,500 new CNG-enabled vehicles and provide 55,000 conversion kits for vehicles currently using PMS.