Amid surging demand for cleaner and cheaper fuel alternatives, the Federal Government on Tuesday formally launched the implementation of its Concessionary Autogas Supply and Pricing Framework for Compressed Natural Gas, aiming to regulate pricing, streamline supply and accelerate the transition to gas-powered mobility nationwide.

The move, led by the Presidential Compressed Natural Gas Initiative, marks a major step in positioning CNG as a critical solution to Nigeria’s fuel subsidy removal and clean energy goals.

Speaking at the Mobility CNG Supply Framework Kick-Off event in Abuja, Programme Director of PCNGi, Michael Oluwagbemi, said the framework would regulate the fast-expanding autogas market and prevent abuse of the pricing advantage provided by the government.

He explained that the new pricing structure, approved earlier in 2024 by the Chief Executive of the Nigerian Midstream and Downstream Petroleum Regulatory Authority, allows for autogas CNG to be priced lower than gas for power generation or industrial use, recognising it as a strategic national industry.

“Today, we are flagging off the implementation of the concessionary pricing structure, which was approved by the Chief Executive of the Nigerian Midstream and Downstream Petroleum Regulatory Authority earlier this year,” he said.

“In a system where gas is used for multiple purposes, there was the risk of arbitrage — buying cheaper gas meant for vehicles and diverting it for industrial or power generation use. This framework eliminates that risk and creates an orderly market where gas is bought, tracked, and used specifically for autogas.”

The framework also lays the foundation for a regulated and efficient marketplace, ensuring that stakeholders across the value chain, from gas suppliers to station operators and vehicle owners, can participate transparently and sustainably.

Speaking on achievements, Oluwagbemi noted that Nigeria’s auto-CNG ecosystem has experienced exponential growth in the last year. According to him, the country now boasts over 65 operational CNG refuelling stations, up from just 20, while more than 28 additional stations are due for commissioning soon.

“Just this week, we commissioned two new BOVAS filling stations in Ibadan. And with Dangote’s recent announcement of plans to add 100 CNG distribution outlets to the 175 already under construction, we are seeing strong private sector alignment,” he added.

On vehicle adoption, he disclosed that the number of gas-powered vehicles had jumped from about 4,000—mostly in Edo State—to over 50,000 daily users nationwide. That figure is projected to rise to between 125,000 and 200,000 vehicles by the end of 2025.

“The queues at CNG stations in cities like Abuja are now a daily sight. It’s a good problem, and it signals rising demand. The government won’t build everything, but by providing the right incentives like concessionary pricing, we can unlock private investment and reach our national target of one million CNG vehicles by 2027,” he said.

Also speaking at the event, the Managing Director of Gas Aggregation Company of Nigeria, Chijioke Uzoho, noted that the pricing framework would enforce regulatory and commercial discipline in the CNG market.

“It will ensure that every molecule of gas supplied under the framework is accounted for, and the pricing structure is adhered to across the value chain,” he said.

In his presentation, Manager of Gas Trading and Network Code at GACN, Oche Agbese, revealed that the firm had secured 20 million standard cubic feet per day of gas, in addition to its existing 20mmscf/d, to meet growing demand.

He said arrangements were in place with gas producers and regulators to ramp up supply as adoption grows.

According to him, a fleet of high-capacity CNG trailers will be deployed to move gas from mother stations to daughter stations and retail hubs nationwide.

Also speaking, the Business Development and Strategy Coordinator for PCNGi, Omolara Obileye, revealed that the initiative had attracted over $500m in private investment and trained more than 2,500 technicians to support vehicle conversion.

She said, “The CNG footprint is now active in 21 states, with 10 more expected to join in the coming months. This expansion is not just reducing transport costs but also lowering the cost of governance and boosting state revenues through domestic gas utilisation.”

The Concessionary Autogas Supply and Pricing Framework is one of several measures under the PCNGi designed to reduce Nigeria’s dependence on petrol, cut emissions, and drive industrial growth through strategic gas utilisation. (PUNCH)