The Nigerian government has fixed the price of Compressed Natural Gas at $1.57MMBtu.
Programme Director/Chief Executive Officer, Presidential Compressed Natural Gas Initiative (PCNGi) Michael Oluwagbemi disclosed this in a statement on Monday.
The figure is lower than the prices set for commercial and power sector players, which are $2.92 and $2.42, respectively.
According to the statement, the Nigerian Mainstream and Downstream Petroleum Regulatory Authority, NMPDRA, has set CNG for various forms of transportation as a special status and would serve as a subset of gas-to-commercial purposes, which entitles it to the categorisation of Gas Based Industries (GBI).
It further noted that the pricing categorisation of CNG as a GBI would last for five years, subject to renewal under the Petroleum Industries Act (PIA) 2021.
“In line with this, NMPDRA has designated mobility Compressed Natural Gas as a special status, which will serve as a subset of Gas to commercial (GTC); this will also entitle it to Gas Based Industry (GBI) pricing categorisation for an initial period of 5 years, and renewable for another five years only by the provisions of Petroleum Industry Act (PIA) 2021. The GBI pricing of $1.57/MMBtu is much lower than ordinary $2.42 and $2.92 for Power and Commercial buyers, respectively.”
Recall that in May last year, President Bola Tinubu announced plans to roll out CNG buses to cushion the impact of fuel subsidy removal.
After months of plans to roll out 2,700 CNG buses, the government recently said it is set to launch the project before May 29 2024.