In a recent nationwide address, President Bola Tinubu revealed that Nigeria is currently spending N2 trillion every month on the importation of petrol and diesel. Despite being rich in oil and gas resources, the President noted that Nigeria has become overly dependent on oil imports, neglecting its vast gas reserves.
Tinubu emphasized that upon assuming office, his administration inherited a nation that was not only reliant on imported oil but also heavily subsidized fuel costs, draining the country’s foreign exchange. To reverse this trend, Tinubu eliminated the fuel subsidy on his first day in office, a move that saw the pump price of petrol surge from around N200 per liter in May 2023 to approximately N700 currently.
To address the ongoing energy challenges, President Tinubu highlighted his administration’s investment in Compressed Natural Gas (CNG) as a more sustainable and cost-effective alternative to petrol and diesel. He announced the launch of the Compressed Natural Gas Initiative, aimed at reducing the nation’s reliance on imported fuel and cutting down transportation costs.
“Fellow Nigerians, we are a country blessed with both oil and gas resources, but we met a country that had been dependent solely on oil-based petrol, neglecting its gas resources to power the economy. We were also using our hard-earned foreign exchange to pay for and subsidise its use,” Tinubu stated.
As part of this initiative, the government has started distributing one million low-cost CNG conversion kits to commercial vehicle owners, who currently consume the majority of imported fuel. Tinubu believes that the widespread adoption of CNG will lead to a 60% reduction in transportation costs and help curb inflation.
Despite being Africa’s largest oil producer, Nigeria’s refining capacity remains low, forcing the country to depend on fuel imports. The Nigerian National Petroleum Company Limited (NNPC) continues to be the sole importer of petrol under the current administration, while licensed individuals handle diesel imports.
In a related development, the Dangote refinery, which was expected to end Nigeria’s reliance on fuel imports, has faced challenges due to difficulties in securing crude supplies from international oil companies. President Tinubu intervened by ordering the supply of crude to the Dangote refinery in local currency, a move he said would save Nigeria over $660 million monthly.
The government remains committed to its CNG initiative, believing it will not only reduce the financial burden of fuel imports but also promote a more sustainable energy future for the country.
