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No end in sight to cooking gas price increase
The surge in the price of cooking gas may not end soon if the current development is to go by.
1 kg of cooking gas is currently N2,000 as against N1,200 that was sold some months back.
Many Nigerians are currently groaning over the surge in the price of cooking gas.
The Exclusivesonline gathered that Nigerians may have to wait for a while unless drastic action is taken to address the sudden increase in the price of cooking gas.
The Nigerian Association of Liquefied Petroleum Gas Marketers [NALPGAM] has also warned that the supply crisis could push millions of households and businesses into deeper hardship.
Operators in the industry attribute the rise to supply pressure in depots, high replacement cost, logistical hiccups, and foreign exchange pressure influencing importation and distribution of LPG and festive demand surge.
The Exclusivesonline gathered that the price of cooking gas has surged three times recently within two weeks. It rose from N1,200 to N1,500, then N1,700 and N1,800 per kilo and now, as at May 27th, is selling for N2,000-N2200 in various towns in Nigeria. Many Consumers refilled a 12.5kg cylinder of gas for N24,700 and more last week.
Executive Secretary of the NALPGAM, Bassey Essien, said that marketers made repeated representations to the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) seeking incentives, but have not received relief.
“The problem is beyond marketers. Domestic suppliers such as NLNG and the Dangote refinery cannot meet the rising demand,” Essien said.
Industry data show NLNG has supplied about 400,000 metric tonnes to the domestic market since 2020, when local demand was around 1.2 million metric tonnes.
Demand has now risen to about 1.9 million metric tonnes, leaving a significant shortfall. Dangote Refinery’s earlier contribution to the local market — previously as much as 50 per cent of its available LPG — has been cut back because some output is being used as feedstock for fertiliser production.
According to him, the NLNG has been supplying the entire 400,000 metric tons to the local market since 2020 when market demand was about 1.2 million metric tons.
Now, the demand has risen to 1.9 million metric tons, and the supply from NLNG cannot come anywhere close to meeting market needs.
According to Essien, off-takers previously obtained between 500 and 5,000 metric tonnes from Dangote, but this has now been reduced to about 250 metric tonnes.
The supply shortage has caused wholesale depot prices to jump to between N25.2 million and N26.2 million for a 20-metric tonnes truck.
Recall that the federal government had, in November 2024, tried to stop the export of LPG to boost domestic supply, but investigations revealed that the export has not stopped entirely.
The Minister of State, Petroleum Resources (Gas), Obongemem Ekperikpe Ekpo, had announced the directive on 22 October 2024 in Abuja, after a high‑level meeting with industry stakeholders, including NNPC Ltd. and LPG producers.
Meanwhile, NALPGAM executive secretary, Bassey Essien, said the domestic price has continued to increase because the quantity supplied by NLNG is benchmarked at international market prices and, as such, marketers would add up their running costs, which pushes up the price that is transferred to consumers.
Also, the Nigerian LPG marketers are aggressively seeking government incentives and market reforms to stimulate demand, stabilise erratic retail prices, which have now surged toward N1, 800 to N2,000 per kg, and triple the country’s annual supply to 6 million metric tonnes.
To achieve sustainable market penetration, the industry is advocating the following critical incentives: the elimination of Value-Added Tax (VAT) on locally produced cooking gas and subsidising the cost of cylinders and accessories for low-income groups and cooperatives.
Developing robust domestic blending, storage, and delivery facilities is also part of their demand to cut landing and operational costs.
Also, enforcing the prioritisation of domestic LPG allocation over exports to prevent severe structural supply deficits, while providing forex intervention to help marketers ease the financial burden of importing equipment and products amid volatile global energy shocks.
Meanwhile, the global LPG market is actively surging, driven by a strong shift toward clean residential energy and petrochemical feedstock needs.
The market valuation is projected to grow significantly from approximately $176 billion to $273 billion by 2034.
However, this upward trend is accompanied by increased price volatility due to geopolitical supply disruptions.