Nigeria’s push to expand compressed natural gas (CNG) as an alternative transport fuel is entering a crucial stage, with the success of the transition increasingly dependent on the country’s ability to ensure reliable supply, efficient distribution and proper safety oversight.
President Bola Tinubu has said more Nigerians should begin to see measurable reductions in transportation costs from October 1 under the National Affordable CNG Transit Programme, as the government continues efforts to expand CNG adoption across the country.
In an exclusive interview with Nairametrics, alternative fuels development consultant Omid Hamidkhani outlined what Nigeria needs to build a sustainable CNG market, from expanding gas and refuelling infrastructure and improving distribution to establishing stronger vehicle inspection, certification and safety systems.
Omid Hamidkhani: In my view, Nigeria already has one of the most important foundations for a successful CNG market: abundant natural gas resources and a large transportation sector that is looking for more economical fuel options. However, having gas resources is not enough. For CNG to become a sustainable, commercially driven market, the entire value chain has to work together.
This includes maintaining a balance between gas supply and demand, having government financial incentive plans, ensuring the availability of qualified suppliers and manufacturers for both station equipment and conversion kits, and having properly trained conversion centres. Nigeria also needs a clear regulatory framework and an integrated monitoring system across the entire value chain.
Omid Hamidkhani: I see this primarily as a value-chain problem rather than simply a shortage of filling stations. Nigeria has been expanding its CNG infrastructure, but demand is also increasing. Recent government plans include additional Mother and Daughter Stations and Mobile Refuelling Units, which shows that availability remains a central issue.
At the current stage of the market, I believe government support is necessary, particularly for the development of CNG refuelling infrastructure. Building a CNG station requires significant upfront investment. This creates a classic first-mover problem: investors need sufficient vehicle demand to justify a station, but vehicle owners need sufficient stations before they are willing to convert their vehicles.
This is where targeted government incentives can make a major difference. Incentives for the construction and expansion of CNG stations can reduce the initial investment risk and help create the infrastructure density needed for the market to grow. These incentives could include tax benefits, import-duty relief on relevant equipment, access to low-cost financing, land support, or other mechanisms that reduce the cost and risk of investment.
In Iran, for instance, during the early stage of CNG adoption, the government provided CNG filling-station equipment at no cost to investors who provided suitable and well-located land for establishing filling stations across the country. By seeing such a big incentive from the government, drivers also started to believe that CNG stations were going to be well spread, so they showed interest in converting their vehicles.
On the other side, people who had well-located land started thinking that, with the growing rate of vehicle conversion, it could be a good business opportunity to apply for free station equipment and run a station in their cities. That’s how this engine ignited.
However, I believe government support should be designed to accelerate the market in these early stages, not permanently replace commercial viability.
Omid Hamidkhani: I believe Nigeria needs to look at this issue from a geographical and long-term infrastructure perspective.
Nigeria is a very large country, and it is not realistic to assume that road-based CNG transportation can efficiently and reliably supply the entire country as the CNG vehicle population grows significantly.
The virtual pipeline model, transporting compressed gas by truck from Mother Stations to Daughter Stations, is useful and, in many locations, it can be an effective way to start developing the market. But it has inherent limitations. Nigeria has a very large geographical area, road infrastructure is not always in good condition, and long-distance transportation of CNG by road adds significant logistics costs and operational risks.
There is also an important geographical issue. Much of Nigeria’s existing gas pipeline infrastructure is concentrated in the southern part of the country, with the network extending toward some central areas. Therefore, connecting the major gas-consuming regions to reliable pipeline infrastructure should become a strategic priority.
Projects such as the Ajaokuta-Kaduna-Kano (AKK) pipeline are important in this context because they can help extend the reach of Nigeria’s natural gas infrastructure toward the north and create a stronger foundation for industrial and transportation gas demand.
In my opinion, Nigeria should therefore pursue a mixed distribution strategy rather than trying to make one model fit the entire country.
Where pipeline gas is economically and technically feasible, pipeline development should be prioritised. In regions that are relatively close to existing gas infrastructure, CNG trucking can continue to serve as an intermediate or complementary solution.
For more remote areas, particularly where building a pipeline is not economically justified in the short term, L-CNG could also be considered. LNG can transport significantly more energy per unit of transported volume than CNG and can therefore make longer-distance supply to remote demand centres more practical.
And we should also be realistic about market development. If certain very remote regions cannot be supplied with gas at a reasonable cost, Nigeria may need to consider whether it makes economic sense to include those areas in the initial nationwide CNG rollout at all.
The objective should not be to put a CNG station in every part of Nigeria at any cost. The objective should be to develop a reliable, economically sustainable national gas distribution network, using pipelines, CNG trucking and L-CNG where each technology makes the most technical and commercial sense.
Omid Hamidkhani: I would divide the requirement into four layers.
First is gas supply and processing. There must be sufficient and reliable gas available at predictable commercial terms.
Second is midstream infrastructure. Natural gas pipeline development such as AKK is the key factor in the long-term view. Meanwhile, the CNG virtual pipeline can play an important bridging and complementary role in the medium term, particularly in areas where pipeline infrastructure is not yet available.
Third is the retail and mobility network, including CNG filling stations and, where necessary, mobile refuelling units, which can help reduce or close the gap before sufficient pipeline development.
Fourth is finance and market development. Nigeria has a high rate of inflation and the financial cost of investment is high. In such economies, subsidised finance plans through low-interest facilities can be an important form of government support for the CNG sector and can also serve as a signal to society to trust the CNG rollout plan. All potential players, including filling-station investors, conversion businesses and vehicle owners, need access to financing because the initial conversion cost can still be a barrier.
The key point is that these investments should not be made randomly. Nigeria should identify major transportation corridors, cities, industrial clusters and fleet concentrations and build infrastructure around them. Private investors need to see predictable utilisation and a reasonable return on investment. Therefore, government has an important role in creating the regulatory and infrastructure framework.
Omid Hamidkhani: The most important point is that CNG safety does not end when the conversion is completed.
The cylinder is obviously one of the most critical components because it stores high-pressure gas. Its physical condition, mounting, protection against damage, cylinder valve and pressure relief devices all need to be monitored periodically.
But we should not focus only on the cylinder. The entire fuel system needs attention, including high-pressure piping and connections, shut-off valves, regulator, injectors, sensors, pressure relief devices, filling valve and electrical components associated with the gas system.
The quality of the original conversion service is also extremely important. A high-quality component installed incorrectly can still create a safety problem.
The vehicle’s operating environment should also be considered. Especially in Nigeria, vehicles can be exposed to high temperatures, rough roads, humidity and overloading. These conditions can affect components over time.
This is why I always look at CNG vehicle safety from a lifecycle perspective.
The correct question is not simply, “Was this vehicle converted safely?” The question should be, “Is this vehicle still safe today, after years of operation?”
That requires proper installation standards, good maintenance, periodic inspection and certification.
