Nigerian manufacturers are increasingly using natural gas as a substitute for diesel and petrol due to the rising costs of these fuels, which have affected manufacturing costs.
Fuel costs have more than tripled since fuel subsidies were eliminated, worsening the nation’s cost-of-living issue.
The federal government launched a compressed natural gas (CNG) program with the goal of cutting transportation costs by about 50% after realising the potential of its enormous natural gas reserves, which total over 200 trillion cubic feet.
This program intends to install CNG buses in key cities and promotes the conversion of automobiles to CNG.
Furthermore, fuel costs have significantly decreased since Dangote Refinery started selling it, going from about N1,700 to N1,350 per litre.
It is anticipated that this cut will ease some of the financial strain on manufacturers who depend on diesel for their operations.
Leaders in the sector stress that switching to natural gas not only solves short-term financial issues but also supports international sustainability objectives.
Given that energy expenditures account for 30–40% of production costs, the Manufacturers Association of Nigeria has recommended companies to implement sustainable energy practices.
Zheng Wei, managing director of Tiget Business
International Limited, commented on the development, stating that despite frequent grid failures, some Nigerian industries are using the enhanced gas supply in the Lagos area to increase production.
Wei, who is in charge of one of the biggest shoe producers in the nation, said that this change is essential to keeping things running in the midst of Nigeria’s power outage. Wei pointed out that although manufacturers deal with issues including currency fluctuations, inflation, and regulatory barriers, power is still the most important problem.