Fuel Subsidy: Nigeria Chooses CNG as Alternative Fuel for Mass Transit - Africa’s premier report on the oil, gas and energy landscape.

Fuel Subsidy: Nigeria Chooses CNG as Alternative Fuel for Mass Transit

By Fasilat Oluwuyi, Reporter, Energy Access

Nigeria’s president, Bola Ahmed Tinubu, has disclosed plans to roll out 3,000 units of Compressed Natural Gas (CNG) buses to cushion the effect of the fuel subsidy removal on Nigerians.

Tinubu disclosed this in a 20-minute televised broadcast addressing the state of the nation July 31, 2023.

The idea is that the cost of fueling buses with CNG is a way cheaper than gasoline prices which have risen 300%fold since subsidy was removed on May 29, 2023.

The president said that the buses would be rolled out across the state and local government in the country for mass transit at a cheaper rate.

Provision has been made for an investment of ₦100Billion to acquire the 3,000 units of the 20-seater CNG buses between August and March 2024, Mr. Tinubu explained.

It would seem that President Tinubu’s plan assumes that CNG will be the alternative mass transit fuel all over the country.

Felix Ekundayo, President of the Nigerian Liquefied Petroleum Gas Association, says that whereas CNG would be value -efficient in the south, it will be quite expensive to deliver it for mass transit in the north.

President Tinubu said on the broadcast: “Part of our programme is to roll out buses across the states and local governments for mass transit at a much more affordable rate. We have made provision to invest ₦100Billion between now and March 2024 to acquire 3,000 units of 20-seater CNG-fuelled buses.

“These buses will be shared to major transportation companies in the states, using the intensity of travel per capital. Participating transport companies will be able to access credit under this facility at 9% per annum with 60 months repayment period.”

Tinubu said the subsidy has outlived its usefulness hence the removal. He added that the removal of the subsidy, has saved the country over a trillion naira.

” In a little over two months, we have saved over a trillion naira that would have been squandered on the unproductive fuel subsidy which only benefitted smugglers and fraudsters. That money will now be used more directly and more beneficially for you and your families.

“Sadly there was an unavoidable lag between subsidy removal and these plans coming fully online. However, we are swiftly closing the time gap. I plead with you to please have faith in our ability to deliver and in our concern for your well-being.

“We will get out of this turbulence. And, due to the measures we have taken, Nigeria will be better equipped and able to take advantage of the future that awaits her.”




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