The Nigerian Compressed Natural Gas (CNG) Industry (“the Industry”) is gradually emerging as a critical component of the country’s clean energy transition. This shift is driven by the removal of petrol subsidies, elevated liquid fuel prices, and the Federal Government’s commitment to decarbonisation and energy diversification. Positioned as a cost-effective, lower-emission alternative to petrol and diesel, CNG is increasingly gaining traction in both transportation and industrial energy applications. As at Q1’2025, over 100,000 vehicles (mainly commercial units) had been converted to CNG, supported by government incentives such as concessional mobility gas pricing of $1.57 per one million British thermal units (MMBtu) and the provision of free or subsidised conversion kits under the Presidential Compressed Natural Gas Initiative (PCNGI). Nonetheless, CNG penetration remains low, with converted vehicles comprising less than 1% of Nigeria’s estimated 12 million registered vehicles.
Infrastructure gaps remain a significant barrier to the broader adoption of CNG. As at April 2025, Nigeria’s CNG network comprised an estimated 27 mother stations (compression hubs), 63 daughter stations (refuelling outlets) and 242 certified vehicle conversion centres. Infrastructure coverage is also particularly limited in the northern and south-eastern regions, where poor pipeline connectivity and high distribution costs continue to impede market expansion. Additional demand-side constraints include high conversion costs, sparse refuelling networks, low consumer awareness and safety misconceptions. Furthermore, exchange rate volatility complicates pricing and investment, as feedgas is priced in dollars but paid for in naira. Despite these challenges, the Industry’s medium-term outlook appears promising. The PCNGI aims to convert one million vehicles and deploy 150 new refuelling stations by 2027. Complementary interventions, such as the ₦122 billion approved under the Midstream and Downstream Gas Infrastructure Fund (MDGIF) in October 2024, are facilitating infrastructure development. Furthermore, major players such as NIPCO Gas Limited, Powergas Global Investment Nigeria Limited and BOVAS Group are scaling vertically integrated operations that span compression, distribution and conversion services.
This report provides a detailed analysis of the Nigerian CNG Industry (“the Industry”), focusing primarily on its use in the transport sector. It includes:
We believe the information, analyses and opinions contained in this Industry report will be of utmost importance to various stakeholders, including:
