LPG Dealers Protest Dangote’s Move to Slash Cooking Gas Prices

Tensions are rising in Nigeria’s Liquefied Petroleum Gas (LPG) market as marketers express strong opposition to Alhaji Aliko Dangote’s plan to crash the price of cooking gas and begin direct sales to consumers. The President of Dangote Group recently revealed that his company will move to cut the retail price of LPG, and may bypass existing distributors if they resist efforts to make the product more affordable.

Speaking during a tour of the Dangote Refinery in Lekki by members of the Lagos Business School’s CGEO Africa group, Dangote lamented the high cost of LPG, saying it remains out of reach for many Nigerians who still rely on firewood or kerosene for cooking. He disclosed that the refinery currently produces around 2,000 tonnes of LPG daily, with plans to scale up production and push more supply into the domestic market.

“If the distributors are not trying to bring \[the price] down, we’ll go directly and sell to the consumers, so that people will now transit from firewood or kerosene to LPG for cooking,” Dangote said.

Currently, cooking gas sells between ₦1,000 and ₦1,300 per kilogram, and Dangote has promised a significant price drop to make it accessible to more households. This move comes as part of a broader strategy to reshape Nigeria’s downstream energy sector, including the planned direct distribution of petrol, diesel, and aviation fuel beginning in August.

However, industry players are pushing back. Godwin Okoduwa, former Chairman of the LPG and Natural Gas Downstream Group at the Lagos Chamber of Commerce and Industry, warned that Dangote’s plan risks creating a monopoly that could harm the market in the long run. He noted that the LPG sector grew from just 70,000 metric tonnes in 2007 to over 1.3 million tonnes in 2022 through years of collaborative effort between the government, Nigeria LNG, and private investors.

“I think it’s monopolistic. A market should be protected to encourage growth. The work has been done, he should respect the market and let us grow. It shouldn’t be a zero-sum strategy. It should be collaborative,” Okoduwa stated.

He urged Dangote to focus on expanding the LPG pie instead of edging out existing players. “The Nigerian market is about 1.3 million tonnes. It can be 5 million tonnes. He should work towards collaboration rather than competition, because at the end of the day, everybody benefits.”

In a further critique, Okoduwa suggested Dangote should channel his efforts into underdeveloped regions such as the Northeast, where LPG penetration is lowest, to help expand national infrastructure.

Echoing similar concerns, Bassey Essien, Executive Secretary and CEO of the Nigerian Association of Liquefied Petroleum Gas Marketers, cast doubt on the feasibility of Dangote’s plan to sell gas directly to end-users or significantly lower the price. “It’s unrealistic. What is the position with PMS? Has the refinery been able to sell petrol directly to you and me into our cars at a very cheap rate?” he asked.