By Patrick Idowu
The Federal Government has formally launched the Concessionary Autogas Supply and Pricing Framework for Compressed Natural Gas (CNG), as part of efforts to regulate pricing, streamline supply, and accelerate the nationwide transition to gas-powered mobility.
Spearheaded by the Presidential Compressed Natural Gas Initiative (PCNGi), the move aims to promote CNG as a cleaner, cheaper alternative to petrol and a key solution to the challenges arising from the removal of fuel subsidies.
Speaking at the Mobility CNG Supply Framework Kick-Off event in Abuja on Tuesday, PCNGi Programme Director, Michael Oluwagbemi, said the new pricing structure approved earlier in 2024 by the Nigerian Midstream and Downstream Petroleum Regulatory Authority, designates autogas as a strategic national industry and ensures its price remains lower than gas for industrial or power generation use.
“Today, we are flagging off the implementation of the concessionary pricing structure approved by the Chief Executive of the Nigerian Midstream and Downstream Petroleum Regulatory Authority,” Oluwagbemi stated.
“In a system where gas serves multiple sectors, there was a risk of arbitrage, diverting cheaper autogas meant for vehicles to industrial use. This framework eliminates that risk, creating an orderly market where gas is tracked and used exclusively for autogas.”
The framework lays the groundwork for a regulated, efficient CNG market that benefits all players from suppliers to station operators and vehicle owners, ensuring transparency and sustainability.
Highlighting the initiative’s progress, Oluwagbemi revealed that Nigeria’s auto-CNG ecosystem has expanded significantly in the past year, growing from 20 operational refuelling stations to over 65, with 28 more due for commissioning.
He also noted that BOVAS recently commissioned two new stations in Ibadan, while Dangote Group plans to add 100 more outlets to the 175 currently under construction.
On vehicle adoption, he disclosed that gas-powered vehicles have surged from around 4,000, mostly in Edo State to over 50,000 nationwide.
That number is expected to rise to between 125,000 and 200,000 by the end of 2025.
“The queues at CNG stations in cities like Abuja reflect the rising demand. While the government won’t build everything, the right incentives like concessionary pricing will unlock private investment and help us reach our national target of one million CNG vehicles by 2027,” Oluwagbemi said.
Also speaking at the event, Chijioke Uzoho, Managing Director of the Gas Aggregation Company of Nigeria (GACN), said the pricing framework would enforce both regulatory and commercial discipline.
“It ensures every molecule of gas is accounted for and the pricing structure adhered to across the value chain,” he noted.
GACN’s Manager of Gas Trading and Network Code, Oche Agbese, announced that the company has secured an additional 20 million standard cubic feet per day (mmscf/d) of gas doubling its existing supply, to meet the growing demand. He said high-capacity CNG trailers would be deployed to distribute gas nationwide.
Omolara Obileye, Business Development and Strategy Coordinator for PCNGi, added that the initiative has attracted over $500 million in private investment and trained more than 2,500 technicians to support vehicle conversions.
She said the CNG footprint now extends across 21 states, with 10 more expected to join soon.
“This expansion is not only reducing transport costs but also lowering the cost of governance and boosting state revenues through increased domestic gas utilisation,” Obileye said.
The Concessionary Autogas Supply and Pricing Framework is one of several initiatives under PCNGi aimed at reducing Nigeria’s reliance on petrol, cutting carbon emissions, and driving economic growth through strategic gas utilisation.
