HomeNewsNigeria turns to natural gas for fuel as petrol prices rise after subsidy removal

Nigeria turns to natural gas for fuel as petrol prices rise after subsidy removal

8/4/2023

(Reuters) - Nigeria is turning to gas as an alternative fuel after it scrapped a popular but costly subsidy on petrol that has seen pump prices rise sharply, angering motorists and businesses that use petrol to generate their own power.

State-oil firm NNPC said late on Thursday it has partnered with NIPCO Gas to speed up the adoption of compressed natural gas for buses, cars and tricycles to lower transportation costs.

These costs have soared in Africa's largest economy, worsening a cost of living crisis after president Bola Tinubu embarked on the country's boldest reforms in decades, which he hopes will kick-start the economy out of slow growth.

On Wednesday, labor unions led a nationwide march to protest the rise in petrol price. Unions later called off the strike after meeting Tinubu, who is under pressure from unions to offer relief to households and businesses.

Under the NNPC-NIPCO deal, 35 compressed natural gas stations will be rolled out in phases to be completed next year and will be able to serve more than 200,000 vehicles daily.

NIPCO already operates 14 compressed natural gas stations, NNPC said, and that the local firm has turned more than 7,000 vehicles to gas, it said.

NNPC added that it intends to deploy an extra 56 stations to complement NIPCO's and that it expects other oil marketing firms to join to boost availability, it said.

Nigeria, Africa's biggest oil producer, has some of the world's biggest gas reserves and is seeking investment to boost its domestic supplies in addition to exports.

Last month, NNPC signed an agreement with UTM Offshore for the local company to construct a 1.5 metric tonnes per annum floating liquefied natural gas plant.

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