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Nigeria’s Innoson to Build Compressed Natural Gas Vehicle Plant in Bayelsa

Nigeria’s Innoson to Build Compressed Natural Gas Vehicle Plant in Bayelsa
Friday, 17 October 2025 08:23
  • Innoson Vehicle Manufacturing (IVM) will build a compressed natural gas (CNG) vehicle assembly plant in Bayelsa State, creating over 1,000 jobs.
  • The initiative supports Nigeria’s $10 billion CNG market expansion, following the removal of fuel subsidies and a sharp rise in petrol prices to 900 naira per liter.
  • The project aligns with the government’s energy transition strategy to leverage natural gas reserves and reduce dependence on imported fuel.

Nigerian automaker Innoson Vehicle Manufacturing (IVM) announced plans to establish a CNG-powered vehicle plant in Bayelsa State, as part of Nigeria’s shift toward cleaner and cheaper energy sources.

Company founder Innocent Chukwuma said the project would generate more than 1,000 jobs and strengthen the state’s industrial base. The plant will assemble buses, ambulances, and utility vehicles powered by compressed natural gas. He did not disclose the project’s total cost.

The announcement comes amid Nigeria’s accelerated gas transition policy, launched after the removal of fuel subsidies in mid-2023. Petrol prices have since surged to around 900 naira per liter, driving demand for gas-powered alternatives.

Nigeria’s CNG market, estimated at $10 billion, has attracted over $700 million in investments since 2024, mainly in refueling and vehicle conversion infrastructure. The number of conversion centers in the country has grown from seven to more than 200 within a year.

Bayelsa State Governor Douye Diri welcomed the investment, saying it aligns with the government’s industrial roadmap for 2026.

“This project comes at the right time, as we work to shift our economy from a consumption-based to a production-driven model,” Diri said.

He added that the new plant would diversify the state’s economy and create skilled employment opportunities.

For the federal government, promoting CNG serves both economic and strategic goals. By replacing petrol with natural gas, Nigeria aims to capitalize on its vast gas reserves while mitigating inflationary pressures caused by higher fuel prices.

Innoson’s entry into the CNG vehicle segment positions it to capture a share of a value chain still dominated by imports, while supporting domestic manufacturing and energy diversification.

Despite the momentum, Nigeria’s CNG sector faces headwinds. The price of CNG has nearly doubled, from 230 to 450 naira ($0.30), exposing the market’s sensitivity to energy costs and infrastructure gaps.

However, CNG remains significantly cheaper than petrol, maintaining strong demand for gas-powered vehicles. Innoson’s challenge will be to keep production costs competitive as energy prices fluctuate.

The project’s success will also test the credibility of Nigeria’s gas transition policy, a key pillar of the government’s industrial and environmental agenda.

This article was initially published in French by Olivier de Souza

Adapted in English by Ange Jason Quenum

 

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