Despite the federal government’s intervention through an export ban on Liquefied Petroleum Gas (LPG) effective from November 1, 2024, prices of cooking gas have continued to soar, reaching approximately ₦17,500 for a 12.5kg cylinder an over 114% increase from June 2023. The rise is driven by profiteering marketers, economic challenges, and infrastructural gaps, leaving millions of Nigerian households struggling with energy costs.
Price Manipulation Amidst Supply Gains
Investigation revealed that although 1kg of LPG sells for about ₦1,030 from off-takers, marketers are charging between ₦1,200 and ₦1,400 per kilogram. A marketer admitted that the absence of pricing regulations and consumer panic over shortages have enabled sellers to inflate prices arbitrarily.
While some outlets, like Mobil stations in residential areas, offer prices as low as ₦1,150 to ₦1,200 per kg, others in industrial zones, such as Anthony, Lagos, charge up to ₦1,300 due to lower demand for domestic use.
Government Efforts Show Marginal Impact
The government’s export ban, which requires sellers to cover exports with cost-reflective imports, has yielded a slight drop in LPG prices. According to an independent fuel supplier, prices fell in November 2024 and remained stable through January 2025. However, affordability remains out of reach for many households.
Industry Reactions and Challenges
Dr. Yinka Opeke, CEO of Smart Energies Limited, highlighted their efforts to promote LPG adoption through free cylinder distribution and an Uber-style mobile app for home deliveries. Meanwhile, the Executive Secretary of the Nigerian Liquefied and Compressed Gases Association, Lanre Bayewu, tempered hopes for a significant price drop, citing factors such as dollar-based pricing, high production costs, and inflation.
Bayewu emphasized that license renewals paid in foreign currency add to production costs, which marketers pass on to consumers. He warned that without addressing production and infrastructure issues, price relief would remain limited despite the export ban.
Infrastructure Deficits and Market Realities
The federal government, which removed VAT on LPG earlier in 2024, plans to address structural gaps by expanding blending and storage facilities within a year. According to Minister of State for Petroleum Resources (Gas), Ekpo, these facilities are critical to utilizing local LPG mixes, such as the Escravos LPG blend from the NNPC-Chevron joint venture, which is currently exported due to unsuitability for domestic use.
Market Trends and Outlook
The National Bureau of Statistics (NBS) reported that LPG prices rose by 80% from January to September 2024, with the cost of 12.5kg cylinders increasing by 39% over the same period. Despite market expansion, growth has plateaued due to rising costs.
Ekpo reaffirmed the government’s commitment to halting all LPG exports until domestic supply stabilizes, stating, “All LPG exports will cease until the domestic market achieves stability and sufficiency.”
As the government pushes for reforms, millions of Nigerians remain hopeful that these interventions will translate into genuine relief from soaring cooking gas prices.
