By Julius Peter, Abuja
The Nigerian National Petroleum Company Limited (NNPC Ltd.) is set to intensify efforts to increase natural gas supply to Compressed Natural Gas (CNG) operators as part of measures to strengthen the country’s alternative fuel market and reduce the impact of rising petrol prices on motorists and transport operators.
The move comes amid renewed increases in the price of Premium Motor Spirit (PMS), popularly known as petrol, with pump prices rising in several parts of the country following changes in wholesale and gantry prices.
Recent market reports indicate that petrol prices have climbed significantly, with some retail outlets selling the product at around N1,300 and above per litre.
The increase has heightened concerns over transportation costs and household expenses, while also renewing calls for faster adoption of cheaper alternative fuels such as CNG.
CNG, which is generally cheaper than petrol on an energy-equivalent basis, has been promoted by the Federal Government as a major component of its strategy to reduce dependence on petrol, lower transportation costs and take advantage of Nigeria’s abundant natural gas resources.
The planned increase in gas supply to CNG operators aligns with NNPC Ltd.’s broader strategy to expand domestic gas utilisation and position natural gas as a major driver of Nigeria’s energy security and economic development.
NNPC’s Executive Vice President, Gas, Power and New Energy, Olalekan Ogunleye, said the company was implementing multiple pathways to transform Nigeria into a global gas hub while simultaneously increasing domestic utilisation of the commodity.
Speaking at the 2026 Gas Technology and Exhibition Conference (GASTECH) in Bangkok, Thailand, Ogunleye said Nigeria was leveraging its more than 215 trillion cubic feet (tcf) of proven gas reserves to support domestic industrialisation and expand its presence in the global gas market.
He said NNPC’s Gas Master Plan was designed to move the country from its current reserves position towards more than 600 tcf of potential resources, while increasing national gas production to 10 billion standard cubic feet per day (Bcf/d) by 2027 and 12 Bcf/d by 2030.
The company’s 2026 Gas Master Plan specifically identifies CNG, alongside power generation, LPG, mini-LNG and gas-based industries, as priority areas for increased gas supply.
The renewed focus on CNG is coming at a time when motorists and commercial transport operators are facing increased operating costs because of higher petrol prices.
For commercial drivers in particular, fuel expenditure represents a major component of daily operating costs. The increased cost of petrol has consequently translated into pressure for higher transport fares, with the attendant effects on food prices, commuting expenses and the general cost of living.
Industry reports have shown that some CNG users are recording substantial savings compared with motorists who rely exclusively on petrol. However, inadequate dispensing infrastructure, limited conversion centres, long queues at some CNG stations and insufficient gas supply have continued to constrain wider adoption.
Increasing gas availability to CNG operators could therefore address one of the major bottlenecks confronting the Federal Government’s alternative-fuel programme.
Government pushes gas-based economy
The development is also consistent with the Federal Government’s broader gas-based economic strategy, which seeks to increase domestic utilisation of Nigeria’s vast gas resources rather than relying heavily on crude oil.
NNPC said the country’s domestic gas utilisation and gas exports should be pursued simultaneously, with exports generating foreign exchange while domestic gas utilisation supports industrialisation, employment creation and energy security.
The company has also entered into a number of strategic gas agreements aimed at improving supply and transportation infrastructure.
In July, NNPC announced six strategic agreements with partners covering gas supply, gas aggregation and network access.
The agreements were designed to improve gas availability to power plants, gas-based industries and industrial clusters while enhancing the security and flexibility of the national gas supply network.
CNG infrastructure remains critical
While increased gas supply is expected to support CNG operators, stakeholders say adequate infrastructure will be equally important to ensure that additional gas volumes translate into greater availability for motorists.
Nigeria’s CNG programme has faced challenges relating to the number and geographical spread of dispensing stations, vehicle conversion facilities and the reliability of supply.
A recent report indicated that CNG adoption had remained relatively low despite the government’s target of converting one million vehicles and expanding the network of CNG refuelling stations.
The Federal Government has also directed the rollout of additional CNG refuelling stations as part of efforts to provide motorists with alternatives to petrol.
NNPC expands multi-energy stations
NNPC Retail Limited is meanwhile moving to integrate CNG into a wider network of modern energy and mobility centres.
The company recently commissioned its first Smart Self-Service Station on Bill Clinton Drive, Abuja.
The facility combines conventional petrol and diesel services with electric vehicle charging, LPG and other mobility services, while provision has been made for future CNG infrastructure.
NNPC Retail Managing Director, Huub Stokman, said consumers were increasingly demanding access to different energy solutions, including CNG and electric vehicle charging, alongside quality products, competitive prices and convenient payment systems.
The development suggests that the company is preparing its retail network for a gradual transition from conventional petrol-only stations to integrated energy hubs offering multiple fuel options.
Potential impact on transport sector
If the planned increase in gas supply is sustained and accompanied by sufficient CNG infrastructure, transport operators could have greater access to a cheaper alternative to petrol.
This could help reduce the cost of operating taxis, buses, tricycles and other commercial vehicles, potentially easing pressure on transport fares.
However, the extent to which consumers ultimately benefit will depend on several factors, including the cost of CNG, availability of dispensing stations, vehicle conversion costs, reliability of supply and the efficiency of the distribution network.
For the initiative to deliver its intended impact, stakeholders will also need to ensure that CNG operators receive adequate and predictable gas volumes, while investments continue in pipelines, virtual gas distribution systems, refuelling stations and vehicle conversion centres.
The renewed push for CNG comes as Nigeria’s energy landscape continues to change following the removal of petrol subsidy and the emergence of greater domestic refining capacity.
With petrol prices subject to market forces and fluctuations in crude oil, refining and logistics costs, the development of alternative fuels has become increasingly important to consumers and businesses.
The downstream petroleum regulator has previously explained that petrol prices under the deregulated market reflect several supply-chain factors, including crude procurement, refinery deliveries, imported cargoes, transportation and taxes.
Against this background, expanding CNG availability could provide motorists with an alternative fuel option while helping Nigeria maximise the economic value of its large gas reserves.
NNPC’s latest gas strategy therefore places CNG within a much broader ambition to increase domestic gas production, expand utilisation, attract investment and transform Nigeria into a competitive global gas hub.
As petrol prices continue to put pressure on households and businesses, the success of the gas supply initiative could become a significant factor in determining whether CNG evolves from a government-backed alternative into a widely accessible and commercially viable fuel for Nigerians.
