CNG Will Save N2trn Monthly Spending On Petrol, Diesel – Tinubu

Nigeria’s President, Bola Ahmed Tinubu, has underscored the economic benefits of the Compressed Natural Gas (CNG) Initiative launched by the Federal Government to reduce transportation costs.

Tinubu said the initiative will save N2 trillion spent monthly on the importation of Premium Motor Spirit (PMS) and Automotive Gas Oil (AGO), also known as diesel into Nigeria.

Tinubu’s government had upon removal of petrol subsidy which led to high price of the commodity, launched the Presidential Compressed Natural Gas initiative (PCNGi) last year with the aim of exploring natural gas for use by vehicles as cheaper alternative for transportation, especially for mass transit.

Launched in October 2023, the Federal Government provided N100 billion (part of the N500 billion palliative budget) to purchase 5,500 CNG vehicles (buses and tricycles), 100 Electric buses and over 20,000 CNG conversion kits, alongside spurring the development of CNG refilling stations and electric charging stations.

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Last month, the Federal Government signed an agreement with various companies involved in the conversion of petrol and diesel-powered vehicles to operate on CNG.

In his address to Nigerians on Sunday, 4th August, Tinubu said Nigeria is blessed with both oil and gas resources, but had been solely depending on oil-based fuel, neglecting its gas resources to power the economy, while also using “hard-earned foreign exchange to pay for subsidies to reduce the cost of importing refined products because the country couldn’t refine crude.

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To address the challenge of high petrol and diesel prices after subsidies were removed, the CNG initiative was launched to power transportation economy and bring costs down.

“This will save over two trillion naira a month, being used to import PMS and AGO and free up our resources for more investment in healthcare and education,” Tinubu stated.

He mentioned that the government has started distributing million of kits at extremely low cost to commercial vehicles that transport people and goods and who currently consume 80 per cent of the imported petrol and diesel in the country.

“We have started the distribution of conversion kits and setting up of conversion centres across the country in conjunction with the private sector. We believe that this CNG initiative will reduce transportation costs by approximately 60 per cent and help to curb inflation.”

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He also stated that the oil and gas industry which had been on a decline, is now improving due to reforms embarked on by his administration in May 2024 to address gaps in the Petroleum Industry Act. According to him, “Last month, we increased our oil production to 1.61 million barrels per day, and our gas assets are receiving the attention they deserve.”  He added that the country has also attracted over half a billion dollars of Foreign Direct Investments in the oil and gas industry since the reforms kicked off.