2025, Vol. 7, Issue 8, Part A

This study investigates the impact of compressed natural gas (CNG) adoption on poverty reduction in Nigeria within the broader context of green economic transition. Using quarterly time series data from 1990 to 2024, the analysis explores the dynamic relationships among poverty rate, unemployment, transport cost, CNG vehicle adoption, and the number of CNG refueling stations. Augmented Dickey-Fuller (ADF) tests reveal that all variables are integrated of order one, I(1). The Johansen cointegration test confirms the presence of at least one long-run equilibrium relationship, justifying the application of a Vector Error Correction Model (VECM). The results indicate that in the long run, unemployment and rising transport costs significantly increase poverty, while the expansion of CNG refueling stations contributes to poverty reduction. However, the number of CNG vehicles was not statistically significant in the long-run model. The error correction term is negative and significant, confirming that approximately 35% of disequilibrium is corrected each quarter, thus validating long-run convergence. Diagnostic tests confirm the absence of serial correlation and heteroskedasticity, and the model satisfies stability conditions. These findings highlight the critical role of CNG infrastructure in addressing poverty through cost-effective and environmentally sustainable energy alternatives. The study recommends policies aimed at expanding CNG station infrastructure, reducing transport costs, and integrating green technologies into national poverty reduction strategies.