The Minister of State for Petroleum Resources (Gas), Ekperikpe Ekpo, launched the Nigerian Gas Vehicle Monitoring System (NGVMS) on Thursday, marking a significant advancement in the federal government’s initiative to enhance safety, accountability, and environmental integrity within the country’s Compressed Natural Gas (CNG) sector.
At the launch, it was announced that the federal government has secured at least $1 billion in private investment to strengthen the entire CNG value chain.
Speaking at the pilot launch held at an NNPC Retail Station in Abuja, Ekpo explained that the NGVMS will ensure that only vehicles converted at accredited facilities using certified kits will be permitted to access CNG at approved stations.
He emphasised that the system will provide comprehensive oversight, from conversion to refuelling, thereby safeguarding citizens and ensuring the integrity of Nigeria’s expanding CNG ecosystem.
Ekpo characterised the initiative as a landmark achievement under President Bola Tinubu’s Renewed Hope Agenda and the Decade of Gas Initiative, which aims to establish CNG as an affordable and sustainable energy option for Nigerians.
Ismaeel Ahmed, Chairman and CEO of the Presidential Initiative on CNG (PiCNG), revealed that over $1 billion in private sector investments has been directed towards Nigeria’s CNG value chain. He added that more conversion and refuelling stations are set to be commissioned nationwide before the end of the year.
Leaders from various transport unions in Nigeria expressed their gratitude to President Bola Tinubu for launching the PiCNG, which aims to alleviate the effects of the fuel subsidy removal in 2023. They noted that under this initiative, members have received over one million free CNG kits, buses, and tricycles (Keke), resulting in significantly reduced transportation costs and a subsequent decrease in food prices across the country.
The union leaders urged the government to prioritise commercial vehicles in the CNG project, ensuring they receive preference. They also called for the expansion of CNG stations nationwide, highlighting that only a limited number of states currently have CNG conversion and refuelling facilities.
Meanwhile, Nigeria’s Dangote oil refinery, with a capacity of 650,000 barrels per day, has been purchasing significantly less crude oil recently due to operational challenges, a situation that analysts suggest may continue into next year, which could keep petrol prices elevated, Bloomberg reported on Thursday.
It is anticipated that Dangote will procure fewer than 300,000 barrels of crude daily this month, according to tanker-tracking data and cargo allocation lists compiled by Bloomberg. This figure, which includes both local supplies and imports, represents a decline of more than 50 per cent from a peak in July and is less than half of the plant’s capacity.
The volume of crude purchased by the refinery is critical for the market, as it is a major petrol producer. Since commencing operations in 2024, it has significantly influenced oil markets across West Africa and beyond, but has encountered operational issues, including unplanned outages and sabotage by workers during reorganisation efforts, as reported by Bloomberg.
These disruptions, along with outages at refineries in Europe and the Middle East, have contributed to unusually high petrol prices in recent months.
Dangote’s petrol unit, the largest in Africa, has faced several stoppages this year and may need to shut down again early next year to complete essential maintenance, according to intelligence firm IIR Energy. Analysts, including those from consultant FGE NexantECA, are therefore doubtful that the refinery will operate at high capacity as it approaches 2026.
A Dangote Industries Ltd executive declined to comment on the future operational status of the main gasoline unit, as reported by Bloomberg.
“We believe it is likely that Dangote will continue to face challenges next year, albeit to a lesser extent than this year,” stated Qilin Tam, head of refining at FGE NexantECA. Unscheduled outages “could create bullish sentiment in the gasoline market moving forward,” especially ahead of next summer’s driving season.
The plant’s residue fluid catalytic cracker unit was scheduled to restart this week after being offline since late August, according to IIR, which monitors outages. Major work is still required on the petrol-making unit, which may need to shut down again in January.
The Dangote Industries executive indicated last week that the unit had already restarted, but did not provide further details.
“European gasoline prices have remained exceptionally high due to Dangote’s operational issues,” commented Sparta Commodities analyst Neil Crosby. “Currently, Dangote’s track record is poor, and if this trend continues, it will support European gasoline prices, and to some extent, distillate prices moving forward.”
Approximately 150,000 barrels per day of feedstock for this month will be sourced from the state oil company, Nigerian National Petroleum Corporation (NNPC), under a recently established supply agreement. NNPC is expected to deliver a similar quantity to Dangote in November, as outlined in cargo allocations reviewed by Bloomberg.
Since peaking in July—largely due to increased imports from the US—the refinery’s crude purchases have declined, suggesting lower operating rates due to capacity constraints. There is also evidence of decreased demand for imports, as Dangote has yet to acquire any West Texas Intermediate for November, according to traders.
However, the refinery retains the capability to increase purchases in the spot market at any time, although Crosby indicated that marginal buying decisions are likely to be influenced month-to-month based on operational challenges. Wood Mackenzie Ltd. forecasts that run rates should improve once the ongoing issues are resolved.
Any further operational setbacks at the refinery would reduce crude processing and lead to a lower-value mix of oil products instead of petrol, according to Alan Gelder, WoodMac’s vice president of refining, chemicals, and oil markets.
This could bolster Dangote’s exports of fuel oil to Asia—a significant consumer of the fuel—while also ensuring a steady flow of European petrol to West Africa to compensate for local shortages, thereby supporting Europe’s refining sector, he added.
