Report: CNG prices could rise to N520 to make gas stations profitable

Compressed natural gas CNG in Nigeria may need to cost around N520 per standard cubic metre (SCM) to make gas stations and related infrastructure financially sustainable, according to a Naira Metrics report.

In the report titled ‘Nigeria’s gas future: CNG retail may hit N520/SCM to ensure commercial viability’, experts cited by Nairametrics said that CNG is cheaper than petrol and diesel.

They added that current prices are “not sufficient to attract large-scale private investment” needed to expand refuelling networks and make the fuel reliably available nationwide.

Despite government-backed initiatives, adoption has been slow.

Two years after petrol subsidy removal increased demand for alternatives, only about 50,000 vehicles run on CNG, far below the government’s target of one million by 2027.

As of January 2025, just over 50 refuelling stations were operational nationwide, though more than 150 are planned by year end.

The number of daughter stations has grown from 20 to over 65, attracting over 450 million dollars in investment and training more than 2,500 technicians.

However, distribution remains heavily truck-dependent, a challenge noted by transport researcher Tonami Playman.

“A CNG truck can transport 9,000 kilograms of gas, while a tanker truck carries 33,000 litres of petrol. To move the same amount of energy, we would need 3.6 times more trucks, increasing traffic and accident risks significantly,” he told Naira Metrics.

Early adopters are already seeing savings. Abuja-based e-hailing driver Samuel Udedike said:

“I now pay N230 per SCM to refill my cylinder. With about N3,500 worth of CNG I can cover the day’s trips that some colleagues cover on petrol or diesel, which often costs them N20,000 to N30,000.”

Lagos driver Soji Tope also noted, “CNG is cheaper, but stations are not as many as regular filling stations. Even so, the savings make the inconvenience worthwhile.”

Passengers are benefitting too. In January 2025, traveller Blessing Ogbebor paid N18,000 for a CNG-powered bus from Lagos to Warri, compared to over N25,000 on petrol or diesel.

Her journey included a 30-minute detour in Benin to refill, showing the infrastructure gap.

Government sources told Nairametrics that as of September 1, 2025, the official CNG price for passenger vehicles was set at N380 per SCM in Abuja and Lagos, with the same rate already in effect elsewhere.

This represents an increase from the previous lowest price of N230 per SCM, narrowing the wide disparity in pricing.

For now, the gap between Nigeria’s CNG ambitions and reality remains large.

Yet experts say with Nigeria’s 209 trillion standard cubic feet of proven gas reserves, the sector could expand rapidly if pricing, investment, and infrastructure challenges are addressed.