Nigeria Targets Lower CNG Transport Fares From October 1

The Federal Government and state governments are working to reduce transportation costs across Nigeria from October 1, 2026, through wider use of Compressed Natural Gas (CNG) vehicles and alternative-energy public transport.

President Bola Tinubu has directed states to work with transport unions and commercial operators to ensure that savings from cheaper vehicle fuel are passed on to passengers through lower fares.

The initiative comes as petrol prices have risen to around ₦1,400 per litre in several major markets, increasing pressure on commuters and transport operators.

Government sets October 1 target

The October 1 target follows an August 27 meeting between Tinubu and Nigeria’s 36 state governors.

The President said the Federal Government and states had agreed to establish a joint implementation structure for the National Affordable CNG Transit Programme, with the objective of translating lower CNG operating costs into reduced transportation fares.

Tinubu has since urged state governments to accelerate the rollout and ensure that the savings generated by alternative-energy vehicles reach commuters.

The administration says a vehicle operating on CNG can spend significantly less on fuel than a comparable petrol-powered vehicle. The President has cited savings of between 60 and 80 percent on fuel costs for CNG vehicles.

Lower fuel expenditure, however, does not automatically guarantee lower passenger fares.

More than 120,000 vehicles converted

According to the Presidency, more than 120,000 vehicles have been converted to CNG over the past three years.

Nigeria also has more than 400 certified CNG conversion centres and over 90 CNG refuelling stations, according to figures cited by Tinubu.

The government is seeking to expand that infrastructure further.

In August, Tinubu directed the rollout of an additional 500 CNG refuelling stations, on top of 500 stations previously ordered, bringing the planned total to 1,000 stations.

The Presidential Compressed Natural Gas Initiative subsequently said the first batch of 500 additional stations was expected by the end of October.

That timetable means a substantial part of the planned expansion will come after the October 1 target for lower fares.

States are already using CNG buses

Some states have already introduced CNG or electric public transport services and reported lower fares on selected routes.

Tinubu cited Borno, where CNG and electric public transport services reportedly charge between ₦50 and ₦100 on routes where conventional commercial operators charge between ₦300 and ₦600.

He also cited Abuja routes where passengers using CNG-converted commercial vehicles reportedly receive fare reductions of about 40 percent.

In Oyo, the President said CNG buses initially reduced the Lagos-Ibadan fare from about ₦8,000 to ₦3,200.

Other examples cited by the Presidency include fare reductions in Adamawa, Enugu, Plateau and Niger states. These figures relate to particular routes or government-supported services and should not be interpreted as nationwide fare levels.

Infrastructure remains a major challenge

The nationwide rollout faces infrastructure constraints.

Transport operators in several states have reported inadequate refuelling infrastructure, long queues at existing CNG stations and difficulty accessing conversion facilities.

PUNCH reported that operators in different parts of the country were concerned about the availability of stations, conversion costs, maintenance and access to CNG.

These issues matter because a cheaper fuel is of limited benefit to a commercial driver if the vehicle cannot be refuelled conveniently.

The distribution of CNG stations is also uneven. The Presidential CNG Initiative has said Abuja currently has 26 operational gas stations, while additional infrastructure is being developed elsewhere.

Conversion costs could affect adoption

Moving a petrol-powered commercial vehicle to CNG requires the installation of a conversion system.

For transport operators, the upfront cost can be a significant consideration, particularly when vehicles are already subject to maintenance expenses and other operating costs.

The government has been supporting conversion infrastructure and financing arrangements intended to make the transition easier, but the extent to which individual commercial operators can access those arrangements will affect the speed of adoption.

The government’s target therefore depends not only on the availability of CNG but also on the number of commercial vehicles that can practically make the transition.

Lower fuel costs do not automatically mean lower fares

One of the central questions surrounding the October 1 programme is whether transport operators will pass fuel savings to passengers.

A reduction in fuel expenditure can lower the cost of operating a vehicle, but transport fares are also affected by vehicle maintenance, spare parts, financing, road conditions, insurance, levies, driver income and other expenses.

PUNCH reported that transport operators have raised concerns about the practical difficulties of transferring CNG savings to commuters.

The Federal Government has therefore asked states to work directly with transport unions and commercial operators to ensure that lower operating costs result in lower fares.

Kaduna provides an existing example

Kaduna is among the states where CNG-powered public transport has already been used on a significant scale.

The state has operated free CNG buses, with officials reporting that the programme has reduced transportation costs for passengers and provided wider access to public transport.

The Kaduna experience is being presented as an example of how alternative-energy public transportation can reduce the cost burden on commuters when the government supports the service directly.

However, government-operated or subsidised buses are different from a nationwide transition involving privately operated commercial vehicles.

For the national programme to affect fares broadly, a larger proportion of commercial vehicles would need access to affordable CNG, reliable refuelling and conversion facilities.

Rising petrol prices add urgency

The CNG programme is being accelerated at a time when petrol prices have increased sharply.

Recent increases have pushed petrol prices to around ₦1,400 per litre in Lagos and Abuja, with higher prices reported in parts of northern Nigeria.

The increase has been linked partly to higher international crude prices amid disruptions in global energy markets.

Higher petrol prices increase operating costs for commercial vehicles and can feed into transport fares and the prices of goods moved around the country.

The government’s CNG strategy is therefore also being presented as a way to reduce exposure to international petroleum-price movements.

Government says Nigeria has enough gas

Nigeria has substantial natural-gas resources, and the government is seeking to increase domestic use of gas in transportation.

Tinubu has argued that greater use of CNG can reduce the country’s exposure to international oil-price shocks because vehicles would rely more heavily on domestically available natural gas.

The expansion also forms part of the government’s broader effort to develop Nigeria’s domestic gas infrastructure and create additional uses for the country’s gas resources.

For the transport sector, the immediate objective is to turn that resource advantage into lower operating costs.

October 1 will test the rollout

With October 1 approaching, the CNG transport programme is entering an important implementation phase.

The Federal Government says more than 120,000 vehicles have already been converted and that additional conversion centres and refuelling stations are being developed.

At the same time, reports from transport operators indicate that access to CNG infrastructure remains uneven.

The government’s stated objective is not simply to increase the number of CNG vehicles. It is to ensure that lower fuel costs translate into lower fares for passengers.

Whether that happens nationwide will depend on the availability of converted vehicles, the expansion of refuelling infrastructure, the cost of conversion and maintenance, and whether commercial operators pass the savings through to commuters.

For Nigerians facing high transportation costs, October 1 will therefore provide a practical test of how quickly the CNG programme can move from government policy and infrastructure expansion to changes in the fares paid at bus stops.