A Budget-Friendly Shift
Oil Marketers project that the adoption of Compressed Natural Gas (CNG) in vehicles will bring about a remarkable cost reduction of over 400% compared to Premium Motor Spirit (PMS) or petrol. The removal of petrol subsidies, as announced by President Bola Tinubu, prompted the search for alternative fuel options that can alleviate the financial burden faced by Nigerians.
Overcoming the Soaring Fuel Prices
The abrupt removal of subsidies led to a surge in petrol prices from N198 per liter to an average of over N540 per liter across the nation. This price hike not only affected transportation costs but also impacted the prices of goods and services nationwide. With CNG’s anticipated affordability, it is expected to counterbalance these soaring fuel prices, offering relief to consumers.
Independent Petroleum Marketers Association of Nigeria (IPMAN) and other oil dealers have been in discussions with the government, emphasizing the importance of transitioning to CNG. These conversations align with the demands of labor unions who advocate for CNG’s inclusion in the energy mix. Recognizing the significance of this transition, the Federal Government has established a steering committee to explore and address these demands, including the conversion of vehicles to run on CNG. A workable framework is expected to be developed by August 14, 2023.