The adoption of Compressed Natural Gas (CNG) is gaining momentum among vehicle owners, commuters and transport operators as rising petrol prices and market volatility push consumers towards cheaper alternatives.

Oil marketers said the increasing cost of petrol is encouraging more motorists and transport companies to convert their vehicles to CNG, with some financial institutions now partnering with vehicle owners and prospective buyers to finance the installation of CNG cylinders.

The development comes amid renewed volatility in the petrol market following supply disruptions and higher global crude oil prices, which have raised concerns among marketers over declining sales volumes and increasing operating costs.

Last month, some fuel marketers suspended the purchase of fresh petrol from major depots after the ex-depot price climbed to N1,220 per litre at some depots in Lagos.

The marketers attributed the development to Dangote Refinery’s suspension of petrol loading from its facility, a situation that triggered supply concerns and pushed the retail price of petrol above N1,300 per litre in some parts of the country.

Petrol had previously sold for an average of N1,080 per litre in Lagos and its environs before the latest increase. The price has since moderated to about N1,230 per litre.

The volatility has, however, renewed interest in CNG, which motorists and transport operators see as a more economical option for reducing fuel expenditure.

The National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria, Chinedu Ukadike, said many motorists and commuters had already switched to CNG.

“Most vehicles and commuters have drastically switched over to CNG. Some financial institutions are now partnering with commuters and interested buyers of CNG to finance the installation of CNG cylinders in their vehicles at a payable when able rate.

“So, this has enabled some people to adopt CNG. The testimonies I have received about CNG are that once you install it in your vehicle, you can be rest assured that the fuel will last for days, depending on your movement,” he said.

An independent CNG station operator in Abuja, Paul Anjoma, also confirmed increased patronage, saying more motorists were visiting CNG stations while transport companies were investing in CNG-powered and hybrid vehicles to cut operating costs.

“We are seeing more people coming to buy CNG. Transport companies are also buying more CNG and hybrid vehicles because they want to reduce their fuel costs,” Anjoma said.

He added that more transport organisations were increasingly focusing on CNG-powered vehicles, a development that was contributing to higher demand for the alternative fuel.

The renewed interest in CNG has also heightened calls for increased investment in Nigeria’s gas infrastructure to support the expansion of production, distribution and retail outlets.

The Petroleum Products Retail Outlets Owners Association of Nigeria had urged the Federal Government to channel gains from higher global oil prices into investments in gas infrastructure.

The National President of PETROAN, Dr Billy Gillis-Harry, said expanding the country’s gas infrastructure would enable petroleum marketers to establish more CNG daughter stations and improve access to the fuel.

According to him, the availability of more mother stations would also strengthen gas supply and distribution across the country.

Ukadike said the Presidential Compressed Natural Gas Initiative had distributed CNG cylinders and conversion kits at subsidised rates while collaborating with IPMAN to make the equipment available at service stations.

The Federal Government introduced the CNG initiative as part of efforts to cushion the impact of petrol subsidy removal on Nigerians.

President Bola Tinubu, in August 2023, announced plans to deploy CNG buses across states and local governments, including the provision of N100 billion for the acquisition of 3,000 units of 20-seater CNG-powered buses for mass transit.

However, the adoption of CNG has fluctuated in line with movements in petrol prices. Motorists had previously switched back to petrol when the price of petroleum products declined.

The earlier decline in petrol prices followed a peace deal between the United States and Iran, which contributed to a drop in global crude oil prices from as high as $120 per barrel to about $77 per barrel.

The latest increase in CNG demand underscores the extent to which fluctuations in petrol prices continue to influence fuel choices among vehicle owners, commuters and transport operators.

With petrol prices remaining relatively high, industry stakeholders said sustained investment in gas infrastructure, wider access to conversion facilities and financing support would be critical to accelerating CNG adoption across Nigeria.