Nigeria plans to combat the effect of fuel subsidy removal with a cheaper energy alternative

• Nigeria plans to introduce compressed natural gas (CNG) as a cost-effective alternative to premium motor spirit (gasoline) in public transportation. 
• The Presidential Compressed Natural Gas Initiative aims to roll out 11,500 new CNG-fueled vehicles and 55,000 conversion kits for existing gasoline-powered cars. 
• The initiative includes strategic steps such as establishing CNG filling stations, offering customs duty and VAT exemptions for CNG conversion kits and targeting mass transit networks to make commuting more affordable for the public.

According to the Presidency, the cost of compressed natural gas (CNG), a less expensive substitute for premium motor spirit, often known as gasoline, is anticipated to be N250 a liter.

The Federal Government and other stakeholders have proposed using compressed natural gas (CNG) as part of their attempts to reduce the cost of public transportation following the loss of fuel subsidies, which increased the cost of the good.

This was announced by Ajuri Ngelale, Special Advisor to the President on Media and Publicity, during a live appearance on the August 22, 2023 edition of the Business Morning show on Channels Television. Ngelale emphasized that Tinubu's very important Presidential Compressed Natural Gas Initiative included lowering the price of gas.

According to Ngelale, the program, which is being overseen by Femi Gbajabiamila, the Chief of Staff to the President, will roll out 11,500 new CNG fuel cars soon, concentrating on mass transport networks throughout all the states of the federation. He pointed out that the effort targets those with lower incomes by offering CNG-fueled buses, which would reduce the cost of PMS-fueled buses too, on average, N620 per liter.

“You’re now looking at about N250 per liter on average for CNG,” he said, “That’s going to have a massive impact on the ability of the everyday Nigerian going to work and back, going to market and back using mass transit across our states. That’s going to do that in the immediate term,” he added.

“But I need to note that it is one thing to deal with the demand side of the CNG equation,’’ describing how the President made a deal with NIPCO through the Nigerian National Petroleum Company Limited (NNPCL) while dealing with the supply side. Ngelale stated.

“The deal effectively is going to roll out 56 new CNG filling stations across all states of the federation within the next 16 months, 21 new CNG filling stations within the next nine months, and then 35 CNG filling stations between April 2024 and April 2025, which essentially takes us to the midterm of his first term in office,” he added.

“We’re also going to be rolling out an exemption on customs duties as well as VAT exemptions on all importation of CNG conversion kits to further accelerate and cheapen the prices of CNG conversion for families across Nigeria and that is the President’s focus at this time,” Ngelale continued.

President Bola Ahmed Tinubu launched the Presidential Compressed Natural Gas Initiative (PCNGI) a few days ago to transform the nation's transportation system. The initiative is aimed at over 11,500 new CNG-enabled cars and 55,000 kits for cars that currently rely on PMS.

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