Tanzania’s compressed natural gas (CNG) market is expanding, perhaps boosting the local economy, lowering pollution, and creating jobs: Industry experts, expect gradual growth in CNG usage as more stations open and more drivers see cost savings in the next three to seven years.
The country’s vast natural gas reserves of 57.54 trillion cubic feet (TCF) as of 2025, combined with rising energy costs for power, industrial application, and transportation, position Tanzania as a leader in East Africa’s CNG sector.
CNG use for vehicles began gaining traction around 2018, but adoption remains limited. Only a few thousand vehicles (around 15,000) have been converted to run on CNG, mainly in Dar es Salaam. Despite the growth of CNG vehicles in Tanzania, there are very few CNG stations in Tanzania — primarily in Dar es Salaam — so drivers often face long queues and limited access.
This means the idea to open the CNG station is riding on big wave, not just the conviction of pioneering investors. More CNG stations will encourage more people to convert due to a wider coverage of CNG stations meaning they will not have to queue as long and can drive further and still be near a station. This leaves a large market potential for CNG filling station investment.
What is Compressed Natural Gas(CNG)?
CNG is a natural gas fuel that’s stored at high pressure and is primarily made up of methane(pure natural gas). CNG is produced through a long and complicated process that reduces the volume of natural gas to less than 1% of its original size. And CNG can be transported through pipeline.
Where CNG is Being Used?
CNG is mainly used by commercial drivers, taxis, three-wheelers (bajajis), and a small number of buses (including Bus Rapid Transit vehicles converted to a petrol-CNG blend).
Competitive Edge Over Electric Vehicles?
While electric vehicles are gaining traction globally, We believe CNG has greater potential in Tanzania and Africa. In a country such as Tanzania with abundant natural gas and limited electricity infrastructure, CNG is a more practical and affordable solution,
What is Driving CNG Growth in Tanzania?
Three main factors are fueling the adoption and utilization of CNG in Tanzania: economic benefits, environmental considerations and government policies.
- Economic Benefits
Energy costs are a major concern for industries and vehicle owners. For decades, power generation and industrial operations in Tanzania have relied on traditional fuels like diesel. But as diesel prices continue to fluctuate, production costs are becoming unsustainable for many businesses. CNG offers a cheaper alternative, helping industries cut costs while maintaining operations.
Similarly, vehicle owners are turning to CNG as a more affordable fuel option amid skyrocketing petrol prices. CNG is significantly cheaper than petrol and diesel. In many cases, filling up with CNG costs less than half of petrol prices for the same distance.
Switching to CNG can save businesses and individuals up to 40-50% compared to diesel. It’s not just about savings—it’s about survival for many companies and drivers,
- Supportive Government Policies.
Waiver of import duties and taxes for all CNG processing equipment as well as conversion kits have made the CNG business a more attractive option for investors, These incentives have encouraged businesses and individuals to transition to CNG, further driving market growth.
- Environmental Benefits
The world is shifting towards sustainability, and Tanzania is no exception, CNG is a cleaner energy source with significantly lower carbon emissions compared to diesel and petrol. This environmental edge is particularly appealing as industries strive to meet global sustainability standards.
Conclusion.
With adequate investment, and policy support, Tanzania’s natural gas reserves could support broad CNG adoption across urban transport and logistics fleets.Lower emissions and reduced fuel costs could significantly benefit the economy and environment.
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Get a full report on Compressed Natural Gas(CNG) as vehicle fuel in Tanzania covering current use of CNG in Tanzania, government targets and initiatives for CNG vehicles, future outlook, planned CNG stations, key challenges, investment and cost structure of CNG filling station, profit margin, Companies (including regional energy firms) are investing in CNG stations, list of reliable original CNG equipment manufacture, expansion of domestic natural gas distribution network and connection
This report will assist you in making informed decisions by assessing how is CNG industry in Tanzania by assessing risks and market potential. It can also assist you in setting up of CNG station in Tanzania and provide you with well-researched information that will make your business planning credible to funding houses, financial institutions and partners.
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