Nigeria Records 160 Operational CNG Stations as Private Investment Hits $2.6bn – Official

Nigeria has recorded about 160 operational Compressed Natural Gas (CNG) refuelling stations across the country, with another 170 facilities at various stages of development and licensing, as the federal government intensifies efforts to expand access to cheaper alternative fuel.

The Executive Chairman of the Presidential Compressed Natural Gas Initiative (PCNGI), Ismaeel Ahmed, disclosed this on Friday during the commissioning of a CNG Integrated Refuelling Unit (IRU) station along New Karu Road, Saint George Akume Way, Karu, Abuja.

Mr Ahmed said the initiative had attracted approximately $2.6 billion in private-sector investments in less than two years, describing the growing investor interest as evidence that the market had moved beyond the proof-of-concept stage.

“This is almost our 106th station across the country in less than two years. This is not beginning any longer. The market has been proven, and investors are trooping in,” he said.

He said the additional stations were undergoing development or awaiting various approvals and licences from the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).

According to him, President Bola Tinubu has also directed another round of infrastructure deployment, including 1,500 units in February and an additional 500 in August, which are expected to come on stream between this year and early next year.

Mr Ahmed said the expansion was necessary to accelerate the adoption of CNG in a country with more than 220 million people and approximately 12 million vehicles.

He argued that Nigeria needed to move faster in developing alternative fuel infrastructure to meet the country’s transportation and energy demands.

“It took Nigeria about 60 years to build approximately 24,000 conventional petrol stations, most of which are privately owned. We are seeing a much faster adoption of CNG and electric vehicles, and the scale of interest is encouraging,” he said.

CNG reduces transportation costs

The PCNGI chairman argued that the adoption of CNG-powered vehicles had reduced transportation fares by between 30 and 40 per cent on some routes where the buses were already operating.

He cited Abuja, Lagos and Kano, as well as inter-state routes between Kano and Katsina, as locations where passengers were benefiting from lower transportation costs.

According to him, passengers who previously paid between N3,000 and N4,000 on some routes now pay about N1,500 when travelling in CNG-powered buses.

He said the initiative was designed to extend the benefits to all local government areas, particularly those with high concentrations of commercial vehicles and passenger traffic.

However, acknowledging that the existing fleet remained insufficient to meet demand, Mr Ahmed said the government was working to deploy more buses and expand access to the alternative fuel.

Asked how the government arrived at the reported 30–40 per cent reduction in transportation fares, he said the figures were based on comparisons between fares charged by operators before and after the introduction of CNG-powered buses on selected routes.

He explained that the initiative obtained information from transport operators about previous fares and compared them with the fares charged after the adoption of CNG.

State House leads by example

Also speaking at the commissioning ceremony , the Permanent Secretary, State House, Temitope Fashedemi, said the facility demonstrated the federal government’s commitment to promoting CNG as a cheaper alternative to petrol following the removal of the petrol subsidy.

Mr Fashedemi said President Tinubu’s administration had introduced CNG as part of efforts to cushion the impact of subsidy removal on Nigerians, particularly in the transportation and energy sectors.

He said Nigeria’s abundant natural gas resources, which had historically been underutilised and flared, presented an opportunity to provide cheaper energy alternatives for households and businesses.

According to him, the State House decided to demonstrate the viability of the initiative by rehabilitating an abandoned fuel depot within its premises and converting it into a CNG refuelling facility.

He explained that the government partnered with the PCNGI and selected Rolling Energy Limited as the private-sector operator to rehabilitate and upgrade the facility.

Mr Fashedemi said the State House provided the existing infrastructure and location, while the private-sector partner financed the rehabilitation and upgrading of the facility.

“The State House did not spend public funds on the facility. We provided the infrastructure and made the location available, while the private-sector partner invested in rehabilitating and upgrading it,” he said.

He added that the facility also housed a vehicle conversion centre where motorists could convert eligible vehicles to run on CNG.

The permanent secretary disclosed that the State House had acquired some hybrid vehicles, while some buses operating within the Villa premises also run on alternative energy.

He said some State House employees would also bring their vehicles for conversion in the coming weeks, subject to technical assessments to determine their suitability.

Mr Fashedemi said the initiative was intended to demonstrate that the government was willing to lead by example rather than merely advocate the adoption of alternative fuels.

He urged private investors to take advantage of the opportunities in the CNG market, noting that government support through infrastructure partnerships could accelerate the expansion of refuelling facilities.

Private sector partnership

Meanwhile, the Chief Executive Officer of Rolling Energy Limited, Mubarak Danbatta, described the project as an example of the benefits of collaboration between government and private investors.

Mr Danbatta commended the State House for making the abandoned facility available for redevelopment, saying the partnership demonstrated how the government could facilitate private investment by providing access to existing infrastructure.

“What you are seeing here is the power of partnership. When private entities and governments come together, this is the result,” he said.

READ ALSO: Otti explains Abia’s preference for electric buses over CNG

He explained that the facility, known as an Integrated Refuelling Unit, combined the dispenser and compressor in a single system, with double-nozzle dispensers that allow vehicles to refuel from both sides.

According to him, the station has the capacity to serve approximately 150 vehicles daily, depending on cylinder size and pressure.

Its vehicle conversion centre is also projected to convert about 12 vehicles daily.

The growing investment in CNG infrastructure comes as Nigeria seeks to diversify its energy mix and reduce dependence on petrol, particularly following the removal of fuel subsidies in May 2023.

The Tinubu-led administration has repeatedly argued that the adoption of the CNG technology is part of the broader effort to reduce high cost of living pressures on Nigerians due to some of the ongoing reforms initiated by the government.