The LPG Crisis in Nigeria: A Call for Stability and Innovation
The current crisis of cooking gas scarcity and soaring prices across the country highlights a critical need for a resilient and stable LPG market that can protect households, food vendors, and other users from recurring challenges.
The supply disruptions have been attributed to the PENGASSAN strike, which led to a dispute with Dangote Refinery. This conflict temporarily halted operations and disrupted logistics, creating artificial shortages and inflating prices. Despite this, major suppliers like Dangote have managed to keep their prices stable, raising questions about the role of other stakeholders in the market.
However, deeper issues such as global price volatility and disruptions in the fragile supply chain have worsened the situation, plunging many families into further hardship. Some have even resorted to using charcoal and firewood, which pose significant health and environmental risks. This is unacceptable in a gas-rich country like Nigeria.
Nigeria’s proven gas reserves stand at 210.54 trillion cubic feet. According to NUPRC data, the average gas production was around 7.59 billion standard cubic feet per day as of July. However, approximately 35.88% of this production was exported, while 27.82% was used domestically, and 29.13% was allocated for field and plant operations, including supply to gas-to-power facilities.
For too long, major gas producers have focused on the LPG export market, leaving the local market undersupplied despite its huge potential. The global consensus on adopting cleaner fuels has not translated into action, exacerbating the problem.
The immediate impact of the current disruption is most felt by already strained households, which are now battling inflated costs. Gas prices have nearly tripled to N3,000 per kilogramme in Lagos, Abuja, and other cities, placing a heavy burden on their budgets. Food vendors, who rely on LPG for cooking, bemoan losing income or having to shut down due to increased costs and scarcity, shrinking the local food economy.
The latest price surge has reversed the gains from recent policy moves, such as the ban on LPG exports, which saw year-on-year domestic gas sales improve by 21.4%. The average cost for a 12.5 kg cylinder of LPG dropped from a peak of N17,283.58 in November 2024 to around N13,750 as of April. However, the NBS LPG Watch Report for July, released in September, indicated that the average cost of refilling a 12.5kg cylinder climbed from N14,261.57 in July 2024 to N20,609.48 in July.
Addressing these wild price swings requires a strategic overhaul of Nigeria’s gas infrastructure. The country must invest in local LPG production capacity, especially through expanding butane separation plants that can process domestic gas and reduce reliance on imports. Regulatory reforms should encourage supplier competition, including transparent pricing and supply agreements, to stabilize the market.
The government, industry players, and unions must collaborate to create contingency buffers and ensure continuous supply, even during strikes or disruptions. This could include strategic stockpiles, policies for fair trade practices, and incentives for local production.
The role of major players like Dangote Refinery is pivotal. Its ability to supply 2,000 tonnes of LPG daily and reduce the cost of 20 metric tonnes of gas from about N24 million to between N14 million and N16 million through direct sales can serve as a stabilizing force.
Nigeria’s domestic gas demand for 2025 is driven by a significant increase in gas-to-power supply, up to 886.83 MMSCF/D, and rising industrial and residential use. Supply disruptions should not be allowed to slow this momentum. Since upstream companies can only meet 77% of domestic gas supply obligations, import procedures should be streamlined while the gap still exists, and transportation logistics, which account for a significant percentage of costs, must be improved.
Labour unions and energy companies must prioritize dialogue and industrial harmony to prevent disruptive strikes that aggravate shortages. Credible voices within Nigeria have emphasized that only a coordinated, well-articulated energy policy, focused on local production, diversified supplies, and regulatory transparency, can break the cycle of scarcity and price surges.
Nigeria’s energy security depends on the ability of policymakers and industry leaders to build a resilient, self-sufficient LPG market and ensure that cooking gas becomes a reliable, affordable energy source for all citizens.