Q3 ’25 CNG Pricing Debacle

In recent weeks, the price of CNG across Nigeria has become a hot topic. What was once being supposedly sold around N230-280 per scm is now being reported as high as N380–450+, depending on vehicle type and location. As prices climb, questions and concerns are inevitably mounting.

The government has been clear: it does not set CNG prices. That responsibility lies with market forces, operators, and the regulatory framework. The FGN has reiterated that no directive has been issued to alter pump prices. Instead, it points to rising input costs, foreign exchange pressures, infrastructure bottlenecks, and investor expectations as the real drivers. 

From where we stand in Powergas, we strongly support the adoption of gas for industrial and vehicular usage. CNG offers not only cleaner air and environmental dividends, but also major cost savings versus petrol and diesel under the same conditions. But for the CNG sector to grow fast, sustainably, and in a way that truly benefits all stakeholders such as consumers, investors, operators, government, there is one principle that must hold: pricing should be market-driven.

Market-Driven pricing enables:

When prices are not enabled by demand and supply, it leads to:

• Under-investment
• Supply constraints
• Hidden subsidies or distortions
• Uneven geography

To ensure the industry matures rapidly and sustainably, here are some priorities:

• Cost Structure: Transparency around key cost drivers such as gas feedstock, compression, logistics, FX exposure, maintenance and labour, enables regulators, customers and stakeholders to better understand how pricing is formed. This shared visibility supports trust and smoother market development.
• Regulatory Oversight Without Heavy Price Controls: While government should enable healthy competition, set baseline safety and service standards, and ensure consumers are protected from price gouging, it must avoid heavy-handed price mandates that distort true commercial dynamics.
• Facilitative Policies & Incentives: Supportive interventions remain critical at this early stage of market development. These include rationalising import duties on conversion kits, offering tax incentives, enabling financing for conversion centres, and sustaining initial concessionary pricing frameworks for autogas CNG. PCNGI’s concessionary gas pricing effort is one example of what can assist while keeping pricing frameworks oriented toward market reality. Such measures help early movers build out infrastructure while still keeping pricing aligned with long-term market realities. 
• Uniform CNG Pricing: It is important to emphasise that CNG for vehicles and CNG for industries is fundamentally the same product — sourced, processed, and distributed through the same infrastructure. For the market to mature sustainably, pricing should ultimately remain uniform across usage types. Differentiating prices risks creating distortions that discourage investment and complicate adoption.
• Expanding Infrastructure & Localization: More refueling stations, more accredited conversion centres, more virtual pipelines to serve remote areas. Also, developing local capacity for conversion kits, spares, technicians to reduce foreign exchange exposure and cost vulnerability.
• Demand Stimulation & Consumer Awareness: Many motorists, fleet owners, industries may still be wary of CNG because of concerns over safety, supply reliability, or conversion cost. Sustained public education, demonstration projects, transparent standards are vital.

At Powergas, we believe that:

• CNG adoption will accelerate most effectively in an environment where pricing is market-driven, not rigidly fixed or political.
• We will continue supporting initiatives that reduce costs (logistics, equipment, conversion) and push for transparent, stable regulatory frameworks.
• Our goal is to ensure that consumers see the cost savings, the environmental benefits, and that operators have incentive to invest, maintain good service, and innovate.

In conclusion, the recent price adjustments reflect more than just sticker shock. It reveals the tension between cost realities (feedstock, infrastructure, financing, FX, operations) and the imperative to keep CNG affordable.

If Nigeria is serious about CNG as part of its energy transition, this sector needs to grow fast, with visible quality, reliable supply, and broad access. And that demands a pricing model that rewards investment, reflects true cost, but also allows for affordability through smart incentives and not arbitrary caps.

Because when pricing is governed by market forces and responsibly bounded by good regulation, then the path to scale, reliability, equity, and sustainability becomes much clearer.