FG Mobilises $1.02 bn to Convert Vehicles to CNG and Expand the Ajaokuta Industrial Park

Peter Uzoho

The federal government has mobilised more than $1.02 billion to advance Nigeria’s Compressed Natural Gas (CNG) vehicle conversion programme. Operations are now active in 24 states, and over 1,000 vehicles have been converted to run on gas.

Strategic Project Advisor for the Presidential Initiative on Compressed Natural Gas (Pi‑CNG), Mr. Olayinka Rufai, provided the update during an industry discussion on opportunities in the CNG and electric‑vehicle conversion space.

The Pi‑CNG programme is a core element of the government’s energy‑transition strategy, aimed at cutting petrol dependence, lowering transport costs, and harnessing Nigeria’s abundant natural‑gas reserves.

Rufai said the scale of last‑mile deployment makes local participation unavoidable. “It is almost impossible to achieve last‑mile deployment without local companies,” he noted, adding that all Original Equipment Manufacturers (ORMs) under the initiative were required to transfer technology to Nigerian technicians.

Although conversion kits are still imported, Rufai said about 65 components can be manufactured locally, including mirrors, seat fabrics, and cylinder assemblies. “To drive this, the government has established a CNG Industrial Park in Ajaokuta as a manufacturing and assembly hub for natural‑gas vehicle components, with plans to localise cylinder production. We are essentially importing a lot of air in those cylinders,” he said, arguing that local production would cut costs and boost industrial growth.

He added that the park, originally planned on 10 hectares, has now expanded to more than four times its initial size.

Rufai also highlighted the government’s work on standards and certification systems to ensure safety and quality in the growing CNG ecosystem. The National Automotive Design and Development Council (NADDC) has developed National Occupational Standards and certification frameworks for conversion technicians, while the Standards Organisation of Nigeria (SON) will certify imported equipment.

The Pi‑CNG programme has partnered with the military, the National Youth Service Corps (NYSC), and regional development agencies to train thousands of Nigerians in conversion technologies. Discussions are also underway with the Nigerian Railway Corporation to transition rail systems from diesel to natural gas.

To attract investors, the initiative is offering incentives such as guaranteed offtake arrangements for manufacturers in the industrial park and import‑duty waivers on CNG‑related equipment.

Rufai said the goal is to build a sustainable value chain that reduces reliance on imported components and creates jobs.