Nigeria is turning to gas as an alternative fuel source, following the abolition of a long-standing petrol subsidy that led to a dramatic spike in pump prices. The removal of the subsidy has stirred discontent among motorists and businesses reliant on petrol to power their operations.
The Nigerian National Petroleum Corporation (NNPC) announced this week that it is collaborating with NIPCO Gas to expedite the adoption of compressed natural gas (CNG) for buses, cars, and tricycles. This move aims to reduce the soaring transportation costs that have been exacerbated by the nation’s recent economic challenges.
The partnership between NNPC and NIPCO will result in the rollout of 35 CNG stations in phases, set to be completed next year. These stations will have the capacity to serve over 200,000 vehicles daily. NIPCO already operates 14 CNG stations and has converted more than 7,000 vehicles to gas, according to NNPC.
The increased petrol prices came on the back of the country’s boldest economic reforms in decades, spearheaded by President Bola Tinubu. While aimed at rejuvenating the sluggish growth in Africa’s largest economy, the reforms have also ignited a cost of living crisis.
Labour unions expressed their dissatisfaction with the petrol price rise by leading a nationwide march on Wednesday. After meeting with President Tinubu, who is facing mounting pressure to alleviate the situation, unions called off the strike.
Beyond the partnership with NIPCO, NNPC disclosed plans to deploy an additional 56 stations to boost the availability of CNG. The corporation also anticipates collaboration with other oil marketing firms.
Nigeria’s position as one of the countries with the world’s largest gas reserves adds weight to its shift towards domestic gas consumption. Last month, NNPC signed an agreement with UTM Offshore for the construction of a 1.5 metric tonnes per annum floating liquefied natural gas plant, signalling further opportunities for investment in the sector.
The drive towards compressed natural gas as an alternative fuel is an integral part of Nigeria’s response to the ongoing economic pressures and its strategic shift away from petrol. As Nigeria continues to seek investment in boosting domestic gas supplies, the collaboration between NNPC and NIPCO sets an essential precedent for the nation’s transport and energy landscape. The development is likely to be closely watched by stakeholders within and outside the country, as Nigeria grapples with the dual challenges of economic revitalisation and energy sustainability.