Cooking Gas Prices Surge to N1,500/kg Amidst Rising Energy Costs

In a troubling development for consumers, the price of Liquefied Petroleum Gas (LPG), commonly known as cooking gas, has surged to N1,500 per kilogram. This increase adds to the ongoing energy crisis in Nigeria, where households are already struggling with high petrol prices.

Recent market surveys indicate that the cost of refilling a standard 12.5 kg cylinder has risen sharply, with prices in Ogun and Lagos States hitting N1,500 per kilogram. In Abuja, the refill cost has increased by 41.6 percent to approximately N17,000, compared to N12,000 just three months ago and N11,735 at the beginning of 2024.

Suresh Kumar, Managing Director and CEO of NIPCO Plc, expressed cautious optimism for future price reductions. He attributed the current high costs to the fact that over 60 percent of Nigeria’s LPG consumption relies on imports. Kumar pointed to upcoming local refinery projects, such as the Dangote Refinery, as potential game-changers in increasing domestic production and stabilizing prices.

In August, Minister of State for Petroleum Resources (Gas), Ekperikpe Ekpo, pledged to tackle surging prices by collaborating with regulators and producers. However, recent market trends show that prices have continued to rise without relief. For instance, a 12.5 kg cylinder in the Lokogoma area of Abuja now costs N17,000, up from N12,000 three months ago, while prices in areas like Kubwa range from N16,200 to N16,500. Prices in outlying areas such as Bwari, Kurudu, and Jikwoyi hover around N1,300 per kilogram.

Ola Oresanya, the Commissioner for Environment in Ogun State, voiced concerns that rising costs may force many households to revert to using charcoal for cooking, further exacerbating environmental issues.

Speaking at the National Conference of the Nigerian Association of Liquefied Petroleum Gas Marketers in Lagos, Kumar noted that domestic production currently satisfies less than 40 percent of Nigeria’s annual LPG consumption of 1.5 million metric tonnes. He urged the government to incentivize companies like Chevron to enhance propane-to-butane conversion, as butane is more suitable for household use.

“With the Dangote refinery and other refineries sourcing crude oil locally, we expect an increase in LPG production, which should drive down costs,” Kumar stated. “Greater local production will also help insulate the market from foreign exchange and international price fluctuations.”

Kumar emphasized the need for government support to bolster investments in gas processing. Since its establishment in 2004, NIPCO has been strategically positioning itself to become a leading LPG distributor, leveraging Nigeria’s vast gas reserves of over 200 trillion cubic feet.

Despite the expansion of LPG consumption—from 50,000 metric tonnes annually when NIPCO entered the market to approximately 1.5 million tonnes today—Kumar believes there is significant growth potential. Currently, fewer than 60 percent of Nigerians utilize LPG for cooking.

“To fully harness our potential, we must increase supply to at least 5 million metric tonnes annually,” he asserted, adding that ending gas flaring is crucial and calling for investments to convert flared gas into usable energy.