PCNGi Implements CNG Supply Pricing Framework As Demand Soars

The Presidential Compressed Natural Gas Initiative (PCNGi) has launched the implementation of its Concessionary Autogas Supply and Pricing Framework to regulate pricing and streamline supply in Nigeria’s fast-growing auto CNG market.

The launch comes amid surging demand for compressed natural gas as an alternative fuel and a rapid expansion of refueling stations across the country, positioning CNG as a key component of the government’s clean energy transition strategy.

Speaking at the Mobility CNG Supply Framework Kick-Off Event in Abuja, Michael Oluwagbemi, Programme Director, PCNGi, highlighted the significance of the framework as a key component of President Bola Tinubu’s ongoing energy reforms.

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

He said, “What we are doing here today is to flag off the implementation of that concessionary pricing framework, because it was necessary, as you can imagine, that in an economy where gas is being used for various purposes, that it’s possible for someone to say, I want to make demands of gas for auto CNG since it’s priced lower, and then go and use it for power.

“So there was a potential opportunity for arbitrage. So we needed to do it in an organised market for autogas CNG, and also then develop the marketplace where people can actually make demand, pay for it, get their gas, use it, sell it into the auto CNG. As you know, that market has been growing tremendously in the last year.

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.

According to Oluwagbemi, the Nigerian auto CNG market has witnessed exponential growth in the past year. From just 20 CNG refueling stations nationwide, the country now boasts over 65, with two newly inaugurated in Ibadan and another 27–28 expected in the coming weeks.

“So there is a growing market. We just got the announcement by Dangote that he’s also adding another 100 daughter stations to the 175 that we have under construction. So you can imagine that we need to get this going in an organised way”, he said.

Vehicle conversion has also seen an increase.

He added, “We’ve gone from about 4,000 CNG vehicles, mostly in Edo State, to over 50,000 daily users across the country. And that doesn’t include trucks, which are being converted at a rapid pace every day.”

He added that long queues at CNG stations in cities like Abuja are now a common sight, a clear indicator of rising demand.

“It’s a good problem, and we’re here to solve it. The market won’t be perfect from day one, but our job is to make it better every day,” he added.

Looking ahead, PCNGi estimates that Nigeria will have between 125,000 to 200,000 CNG vehicles on the road by the end of 2025, aiming to hit a national target of one million vehicles by 2027.

While the PCNGi is spearheading the initiative, Oluwagbemi emphasised that the private sector is responsible for the majority of vehicle conversions.

“Our role is to incentivize and enable. The government won’t build everything, But by providing targeted incentives like concessionary gas pricing, we can catalyze private investment and deliver a more secure energy future for Nigerians,” he said.

PCNGi Implements CNG Supply Pricing Framework As Demand Soars is first published on The Whistler Newspaper