The price of Liquefied Petroleum Gas (LPG), commonly known as cooking gas, has surged to N1,500 per kilogram, Petroleumprice has learned.
Suresh Kumar, the Managing Director/CEO of NIPCO Plc, has expressed optimism that domestic refineries, including the Dangote refinery, will help reduce the cost of cooking gas. He noted that over 60% of the cooking gas consumed in Nigeria is currently imported.
As of Sunday, the price of cooking gas peaked at N1,500/kg in various retail outlets across Lagos and Delta States. In Kaduna, refilling a 12.5kg cylinder has risen by over 40%, from N12,000 in July 2024 to N16,800.
This significant price hike reflects ongoing market trends and may impact consumers, many of whom depend on LPG for their daily cooking needs.
In August, Minister of State for Petroleum Resources (Gas), Ekperikpe Ekpo, vowed to reduce the rising cost of LPG. He stated, “I will invite the regulators and gas producers to find ways to bring down the cost.”
However, a recent market survey conducted on Sunday revealed that prices have not dropped but have instead risen further. In the Lokogoma area of the FCT, LPG now sells for N17,000, a 41.6% increase from the N12,000 charged three months ago. In Kubwa, the price ranges between N16,200 and N16,500, while in the outskirts of Bwari, Kurudu, and Jikwoyi, LPG is sold at N1,300 per kg.
Ola Oresanya, Commissioner for Environment in Ogun State, previously warned that many Nigerians might switch to charcoal for cooking if LPG prices continue to climb.
At the National Conference of the Nigerian Association of Liquefied Petroleum Gas Marketers 2024 in Lagos, Kumar emphasized the insufficiency of local LPG production. He urged the government to encourage Chevron to convert more of its propane output to butane for domestic use. “Less than 40% of the 1.5 million metric tonnes consumed domestically is produced locally. The government must encourage companies like Chevron to convert propane to butane,” he said.
Kumar also addressed the rising costs amid a mix of local and imported supplies, expressing confidence that prices would decrease as domestic production improves. “With refineries like Dangote sourcing crude oil in local currency, the volume of LPG produced locally is expected to increase, which will, in turn, drive down the price,” he explained.
He continued, “Reliance on imported LPG will decrease, and prices will stabilise as more is produced locally, reducing exposure to foreign exchange fluctuations.”
Kumar highlighted the need for more investments in pipelines, storage, and bottling facilities to accommodate growing production. “Our infrastructure can handle up to 5 million MT annually,” he added, calling on the government to incentivise investments in gas processing.
He pointed out that NIPCO, operational since 2004, initially focused on petroleum fuels but has since shifted to LPG. “Our long-term goal is to lead in the marketing and distribution of LPG,” he stated.
The company, he said, has made significant investments in infrastructure. “In 2008, we invested in an LPG facility in Apapa with a capacity of 5,000 metric tonnes. Today, that has grown to over 20,000 metric tonnes, thanks to strategic partnerships,” Kumar shared, adding that NIPCO has expanded its LPG stations across Nigeria.
While LPG is essential for homes, Kumar also sees a future in Compressed Natural Gas (CNG) for industries and transportation. “In the early 2000s, Nigeria consumed just 50,000 MT of LPG annually. Today, it’s about 1.5 million MT, but this is still low for a country with over 200 million people,” he remarked.
Kumar stressed the need for Nigeria to embrace LPG more broadly, aiming to grow consumption from 1.5 million MT to levels appropriate for the country’s population size. He called for collaboration with regulators and other stakeholders to end gas flaring and boost supply. “Substantial investments are needed to capture and process flared gas to increase domestic supply,” he said.
He acknowledged that current high prices are curbing consumption but believes the situation will improve. “With more players entering the market, we anticipate a correction soon,” Kumar stated.
He urged the government to support local refineries, including Dangote, to increase LPG output, which will drive down prices and make cooking gas more accessible to Nigerians. “It’s essential for the government to back these refineries in their efforts to significantly increase LPG output,” he concluded.
