CNG Subsidy Removal and Nigeria’s Energy Crossroads: Edo State’s Role in a Sustainable Transition

 

By Felix Osemwengie Isere, Esq.

When the Federal Government abruptly removed the subsidy on compressed natural gas (CNG) after promoting vehicle conversions at discounted rates, Nigerians were left stranded mid-transition. What was meant to be an affordable and eco-friendly alternative now looks like another cost burden on struggling households. This shift raises the bigger question: where is Nigeria’s energy transition really heading, and how can states like Edo lead the way?

Nigeria sits on an estimated 210.5 trillion cubic feet of proven gas reserves, the largest in Africa, with enough supply to last for over 90 years. Yet, much of this resource is wasted through flaring or left untapped due to infrastructure gaps and inconsistent policies.

*CNG Adoption: A Mixed Story*

The Presidential CNG Initiative (PCNGI), launched in 2023, aimed to convert 150,000 vehicles in its first year and reach one million by 2027. Progress has been visible: over 100,000 vehicles converted, more than $200 million invested in infrastructure, and real savings for drivers CNG at N230 per litre compared to petrol at over N1,000.

But challenges are just as stark. With only 34 CNG stations nationwide, conversion costs ranging from N100,000 to N1.8 million, safety fears following an Edo explosion, and low public awareness, adoption remains fragile. Currency volatility has only made conversion kits more expensive.

*Why Edo Matters*

Edo is not just another state in this debate, it is an energy hub. The Azura-Edo Power Station supplies about 10% of Nigeria’s grid electricity, while projects like Duport Energy Park, Seplat Energy’s gas plant, Ossiomo, and Ihovbor Power Plant underscore Edo’s importance in Nigeria’s energy future.

Edo’s peculiar advantage lies in its dual identity as both a gas-rich state and an industrial hub. But the 2024 CNG explosion in the state also highlights the risks of poor regulation and unaccredited operators. If Edo gets this right, it can serve as a national model for safe, sustainable energy adoption.

*The Way Forward*

1. Invest in infrastructure and regulation: More certified conversion centers and safe refueling stations are urgently needed.

2. Diversify the energy mix: Pair gas commercialization with solar power to reduce overdependence.

3. Protect host communities: Ensure jobs, infrastructure, and equity for locals, avoiding mistakes of the petrol era.

4. Lower conversion costs: Bring back targeted subsidies or financing schemes for drivers and small businesses.

5. Drive awareness: Safety campaigns and success stories can rebuild public confidence.

6. Encourage partnerships: Public–private investment can expand infrastructure faster, especially in underserved areas.

*Conclusion*

The end of CNG subsidies has exposed the fragility of Nigeria’s energy transition. Yet with abundant gas reserves and growing adoption momentum, the picture is not entirely bleak. Edo State’s unique energy infrastructure gives it the potential to become more than just a gas hub, it can be the blueprint for Nigeria’s sustainable energy future.

But this will only happen if policies are consistent, infrastructure is expanded, and communities benefit directly. Anything less risks turning another opportunity into a missed chance for progress.

*Felix Osemwengie Isere* is a lawyer and former Special Adviser to the Edo State Government on Oil and Gas.