The Federal Government of Nigeria has announced a plan to expand compressed natural gas (CNG) infrastructure, aiming to reduce transportation fares by over 40%.
This initiative, formalized through a Memorandum of Understanding signing ceremony in Abuja on Friday, promises significant savings for passengers.
Speaking during the event, Programme Director of the Presidential Compressed Natural Gas Initiative, Michael Oluwagbemi, emphasized the government’s commitment to affordable transportation amidst rising fuel prices.
“We are working hard to bring transportation prices down, especially during these challenging times. Mr. President has introduced a great alternative to the petrol problem—compressed natural gas,” he stated.
Under the new plan, fares for eight-passenger vehicles will be reduced from N12,000 to N7,000, while fares for four-passenger vehicles will drop from N13,000 to N8,000 for trips from Abuja to Ajaokuta train station. Oluwagbemi noted, “Specifically, the trip from Itakpe Station to Warri costs N5,000, showcasing the benefits of our infrastructure investments over the past five years.” This represents a significant savings of over 40% for passengers traveling from Abuja to Ajaokuta Station.
The initiative not only aims to provide immediate financial relief but also encourages the conversion of existing commercial vehicles to CNG, which is sold at a discount of up to 60% compared to petrol prices.
“The converted vehicles will operate at a significant discount, remain flexible, and run cleaner, cheaper, safer, and more reliably,” Oluwagbemi asserted.
To facilitate the transition, 10 CNG fuel conversion centers have already been established between Abuja, Itakpe, and Ajaokuta, including six stations operated by the Nigerian National Petroleum Corporation and two by NIPCO.
Additionally, Greenville is set to inaugurate 17 more refueling stations across Nigeria by year-end.
Oluwagbemi also disclosed that partnerships have been formed with Bovas to introduce additional facilities in Abuja and with Matrix Energy to establish five new stations in Delta and Abuja. NNPC has completed six stations in Abuja, with six more expected in Lagos by October.
Vehicle inspections are expected to conclude next week, and conversions are set to commence shortly thereafter. “With over 100 vehicles applying for conversion, we anticipate a two-to-three-week process,” Oluwagbemi explained.
The Nigerian Union of Road Transport Workers (NURTW) has committed to ensuring compliance with the new rates. Secretary of the NURTW’s Ajaokuta unit, Adeyemo Teslim, expressed gratitude for the collaboration, stating, “We believe joining forces will yield multifaceted benefits, which we’re eager to support.” He highlighted the need for expanded coverage to enhance accessibility across various regions.
To ensure enforcement, the agreement includes a mechanism to monitor compliance with the new fare structure. Operators violating agreed-upon fares will reimburse the full installation cost, Oluwagbemi warned.
The transportation fare reductions are expected to be implemented nationwide by the end of October, with converted vehicles prominently labeled to indicate reduced fares.
This initiative aligns with the government’s goal to have at least one million CNG vehicles on Nigerian roads by 2027 and aims to save $4.4 billion annually on fuel importation.
To encourage transporters to convert their vehicles, the government offers a N750,000 subsidy per transporter.
