Nigeria’s downstream petroleum sector is witnessing a dramatic shift as Compressed Natural Gas (CNG) adoption accelerates while petrol consumption at filling stations continues to decline. The trend underscores the impact of rising pump prices, regulatory reforms, and consumer adaptation to alternative fuels.
CNG Emerges as Cheaper Alternative
Across the Federal Capital Territory (FCT) and other urban centres, long queues now form at CNG retail outlets, with prices averaging ₦230–₦235 per kilogram a fraction of petrol’s current pump price of over ₦865/litre at most stations.
Drivers, especially those in the ride-hailing sector, are increasingly converting vehicles to CNG due to cost efficiency. At NNPC’s Wuse Zone 2 CNG station, a Bolt driver explained that a 10kg refill costs just ₦2,300, sustaining operations for hours while yielding over ₦10,000 in daily returns.
Industry analysts say the price differential of nearly 300% between petrol and CNG has tilted consumer preference, accelerating Nigeria’s transition to gas-based mobility under the Federal Government’s Presidential CNG Initiative.
Petrol Consumption Falls Sharply
Data from the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) reveals that daily petrol demand dropped 28% in two years, sliding from 68.35 million litres in June 2023 to 49.27 million litres in June 2025.
The removal of petrol subsidies in May 2023, which pushed pump prices from under ₦200/litre to well above ₦600/litre within weeks, triggered the steep decline. Since then, frequent retail price adjustments sometimes weekly have further eroded consumer confidence.
Station managers nationwide report sluggish sales. In Abuja, a 30,000-litre tanker now takes two months to offload, compared to just days before subsidy removal. Similar trends are observed in Lagos, Kano, and Asaba, where attendants lament dwindling patronage and rising idle time at pumps.
A Trying Time for Marketers
The Independent Petroleum Marketers Association of Nigeria (IPMAN) describes the current market as a “trying time” for operators. Many marketers now sell one truck per month or less, threatening business sustainability.
IPMAN’s spokesperson, Chief Chinedu Ukadike, noted that demand is being eroded by CNG conversions, reduced cross-border smuggling (following subsidy removal), and shifting consumer behaviour. He warned that without intervention, independent marketers risk extinction by 2028.
Market Volatility and Price Wars
Frequent pump price changes have worsened instability in the downstream. Industry consultant Henry Adigun observed that continuous adjustments fuelled by competition between private depots and the Dangote Refinery undermine investor confidence.
Adigun stressed that a stable competitive environment is vital to attract capital and safeguard the sector. He cautioned that volatile pricing could deepen financial strain on marketers already burdened with bank loans for product purchases.
Gas Gains Momentum
Nigeria’s downstream market is at an inflection point. Petrol, once the unrivalled fuel of choice, is steadily losing ground to CNG, which offers affordability, cleaner combustion, and policy support.
If the Presidential CNG Initiative maintains its momentum, analysts project that petrol demand could fall by up to 50% by 2026, reshaping the country’s fuel consumption profile.
For consumers, the message is clear: CNG is no longer just an option it is fast becoming the future of mobility in Nigeria.