CNG Price Surges to N450/SCM as FG Withdraws Subsidies

The price of Compressed Natural Gas (CNG) in Nigeria has nearly doubled to N450 per standard cubic meter (SCM) following the Federal Government's decision to reduce subsidies on the alternative fuel, exacerbating long queues at refueling stations and fueling fears among motorists that they may revert to pricier petrol and diesel. 

The hike, confirmed by retailers and officials from the Presidential Compressed Natural Gas Initiative (PCNGI), marks a significant shift in the government's push to promote CNG as a cheaper, cleaner energy option after the 2023 petrol subsidy removal.

The Programme Director of the Presidential Compressed Natural Gas Initiative, Michael Oluwagbemi, us yet to respond about the development. 

According to multiple sources, including a major CNG retailer and an anonymous PCNGI official, the new pricing structure differentiates between vehicle types: trucks now face the full unsubsidized rate of N450/SCM, while commercial drivers and private car owners pay a subsidized N380/SCM to mitigate impacts on transportation costs. 

The price jump from the previous N230/SCM was implemented by NNPC Gas Marketing Limited (NGML) as part of a broader review to ensure commercial viability and attract investors, with warnings that rates could climb further to N500 or even N600/SCM in the coming months. 

"The government subsidised it to attract users and sold it to marketers at a reduced rate, but now with the withdrawal, prices are aligning with market realities," the retailer told Punch Newspaper, noting that the cap below cost had been in place since 2023.

The development comes amid persistent challenges in the CNG ecosystem, including insufficient refueling infrastructure and supply shortages. 

Drivers in Lagos and Abuja reported queues stretching up to 1.5 kilometers at stations, with some waiting hours to fill up. 

Ride-hailing driver Adeyemi Paul expressed frustration, stating, "Some of us spent up to N1.5 million or more to convert our vehicles to CNG. Now with the price increase and the long queues, many may have to return to petrol. The difference between CNG and petrol is not significant anymore."