FG Secures Discounted CNG Prices As It Prepares To Roll Out Non-petrol Buses, Tricycles

FG Secures Discounted CNG Prices As It Prepares To Roll Out Non-petrol Buses, Tricycles

  • The FG has negotiated a deal to buy discounted CNG below industry rates in preparation for the rollout of buses
  • NMPDRA has accepted the offer and has slashed the cost of natural gas to support government's initiatives
  • The government hopes the CNG initiative will help provide relief to the public battling with high fuel prices

Legit.ng journalist Dave Ibemere has over a decade of business journalism experience with in-depth knowledge of the Nigerian economy, stocks, and general market trends

The Nigerian Mainstream and Downstream Petroleum Regulatory Authority (NMPDRA) has reached an agreement with the Presidential Compressed Natural Gas Initiative (PCNGi) on a new natural gas price ahead of the rollout of CNG buses.

CNG prices in nigeria
FG secures discounted CNG prices Photo credit: Nurphoto
Source: Getty Images

Michael Oluwagbemi, the programme director/chief executive officer of PCNGi, stated that the NMPDRA has agreed to establish a fixed price of $1.57 per MMBtu for CNG.

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This rate is notably lower than the prices set for commercial and power sectors, which stand at $2.92 and $2.42 respectively.

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According to reports by Punch, Oluwagbemi emphasized that the NMPDRA has designated CNG for various transportation uses under a special status.

This classification places CNG as a subset of gas for commercial purposes, thereby categorizing it under Gas Based Industries (GBI).

The statement further indicated that this pricing classification of CNG as a GBI would remain effective for five years, subject to renewal under the Petroleum Industries Act (PIA) 2021.

The statement reads:

To align with the initiative, NMPDRA has assigned a special status to Compressed Natural Gas (CNG) for mobility purposes, categorising it under Gas to Commercial (GTC).
"This designation grants it eligibility for Gas Based Industry (GBI) pricing classification for an initial 5-year period, renewable for an additional 5 years subject to provisions outlined in the Petroleum Industry Act (PIA) 2021.

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"The GBI pricing, set at $1.57/MMBtu, is significantly lower compared to the standard rates of $2.42 and $2.92 for Power and Commercial buyers, respectively."

Nigerian govt set to roll out CNG buses

Earlier, Legit.ng reported that the Nigerian government made public its plans to introduce at least 2,700 automobiles that are not powered by petroleum products.

This step, according to the presidency, is an attempt towards phasing out the climate unfriendly vehicles that made up most of Nigerians autocars.

The government promises 100 workshops where conversion of the traditional vehicles could be made and 60 refueling sites.

Source: Legit.ng

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