The recent hike in the price of Compressed Natural Gas (CNG) to N380 per standard cubic meter (SCM), from N230, raises concern about the Federal Government’s plans to adopt CNG to cushion the impact on transport costs and economic hardship faced by Nigerians.
This signifies a 65.22 per cent hike or N150 increase in the price of CNG per SCM.
The price hike, as announced by NIPCO Gas Limited in a statement seen by Pinnacle Daily, took effect on Monday, September 1.
“We wish to inform you that effective 01 September 2025, the mobility CNG price for all public transport vehicles – this will include all passenger cars & buses – will be N380 per SCM.
“We sincerely appreciate your understanding and continued patronage,” the management of NIPCO stated.
Pinnacle Daily also gathered that NIPCO had instructed all gas stations to effect the upward price adjustment because the Nigerian National Petroleum Company (NNPC) Limited has now taken full control of CNG as NIPCO’s contract expires today.
Worries and hardship linger
Following President Bola Tinubu’s declaration on May 29, 2023, when he assumed office, that petrol subsidy was gone, the pump price of petrol surged from about N190 at the time to about N650 and subsequently rose as high as N1,020 before hovering currently between N865 and N1,000 in some states.
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The hike in petrol prices resulted in the skyrocketing prices of goods and services and has been causing untold hardships to millions of citizens.
To cushion the impact on transport costs, the federal government adopted the use of CNG, which is expected to take centre stage for economic convenience.
It then initiated a nationwide CNG programme to provide cost-effective and environmentally friendly transportation alternatives for the masses.
Minister defend CNG as a cost-effective aim
Buttressing the aim of the initiative at this year’s Nigerian International Energy Summit in Abuja, on Tuesday, February 27, the Minister of State for Petroleum Resources (Gas), Ekperikpe Ekpo, insisted that the federal government’s adoption of CNG would reduce the high cost of transportation.
Stressing that the gas sector has witnessed a significant transformation under the present administration, Ekpo assured that CNG will get to all Nigerians as an alternative to petrol and diesel.
He even claimed there has been substantial progress in gas infrastructure development, policy reforms, gas utilisation, and domestic initiatives, marking a remarkable turnaround for the sector.
“With over 100,000 vehicles targeted for conversion and a $200m investment in CNG infrastructure, this programme is crucial in reducing transportation costs and promoting energy sustainability,” Ekpo said.
However, industry experts are concerned that the recent hike in the price of CNG per SCM added to the worries over its wider accessibility and commercial viability.
Experts fear further hikes.
Commenting on the recent hike, a development economist, Kalu Aja, questions the government’s removal and imposition of subsidies on certain oil and gas products.
He said, “Tinubu removed the PMS [petrol] subsidy, generated trillions in new revenues, then imposed a new 5% regressive fossil fuel tax on all citizens who use PMS, aviation fuel and diesel.”
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He noted the government placed exemptions, including on clean and renewable energy products, kerosene, cooking gas and CNG.
“On CNG, the price has gone up as the FGN has removed the subsidy on CNG,” Aja said.
“I am not sure of the wisdom of taxing locally refined fossil fuels in a fossil fuel nation. If the intent is to change behaviour and have a cleaner environment, why not use the revenues generated from the removal of PMS subsidies to subsidise green power sources?”
He further questioned why the government would tax fossil fuels, offer an exemption in CNG and then remove the subsidy on CNG.
“What sort of economics is this?” Aja added.
Other experts also fear that for CNG to become as widely accessible as petrol and diesel across the country, the retail prices may surge to around N520 per SCM.
They believe that the current price of CNG, while cheaper than petrol and diesel, is not sufficient to attract the large-scale private investment needed to expand refuelling infrastructure nationwide and make CNG reliably available for everyday use.
Pinnacle Daily can report that two years after the launch of the CNG, its adoption remains below expectations.
Alex is a business journalist cum data enthusiast with the Pinnacle Daily. He can be reached via ealex@thepinnacleng.com, @ehime_alex on X
