As Nigerians grapple with the rising cost of petrol, the price of Liquefied Petroleum Gas (LPG), commonly known as cooking gas, has also surged to N1,500 per kilogram.

    Suresh Kumar, the Managing Director and CEO of NIPCO Plc, expressed optimism that the Dangote refinery and other local refineries would help reduce the price of cooking gas. He also highlighted concerns that more than 60% of the LPG consumed in Nigeria is imported.

    Checks by The Naijaecho.com.ng confirmed that cooking gas prices have peaked at N1,500 per kilogram in some retail outlets in Ogun and Lagos states as of Sunday. In Abuja, the average cost of refilling a 12.5kg cylinder has jumped by 41.6%, now standing at N17,000 in various locations.

    In contrast, the same quantity of gas sold for N12,000 in July and N11,735 in January 2024, reflecting a sharp increase in price. This trend could significantly impact consumers who rely on LPG for everyday cooking.

    Price Of Cooking Gas

    In August, the Minister of State for Petroleum Resources (Gas), Ekperikpe Ekpo, pledged to tackle the rising cost of cooking gas, stating that he would engage regulators and producers to find ways to lower the price. Despite these assurances, a new market survey conducted on Sunday revealed that prices have continued to climb.

    In Lokogoma, Abuja, a 12.5kg cylinder of gas now sells for N17,000, a 41.6% increase from N12,000 three months ago, translating to a price of N1,400 per kilogram. In Kubwa, the price ranges between N16,200 and N16,500, up from N12,000. In areas like Bwari, Kurudu, and Jikwoyi on the outskirts, gas prices stand at N1,300 per kilogram. Some major distributors continue to sell between N1,300 and N1,400, depending on location.

    Ogun State’s Commissioner for Environment, Ola Oresanya, previously warned that if the price of LPG continues to rise, many people might revert to using charcoal for cooking.

    At the recently concluded National Conference of the Nigerian Association of Liquefied Petroleum Gas Marketers 2024 in Lagos, Suresh Kumar noted that local LPG production remains insufficient, urging the Federal Government to encourage Chevron to convert more of its propane output into butane, which is more suitable for domestic use.

    Kumar explained that less than 40% of the 1.5 million metric tonnes of LPG consumed domestically is produced locally. He stressed that increasing local production would help stabilize prices, as domestic refineries, including the Dangote refinery, source crude oil in local currency, reducing reliance on imports and shielding prices from foreign exchange fluctuations.

     Price Of Cooking Gas

    Kumar also emphasized that greater local LPG production would not only lower prices but also attract investments in pipelines, storage, bottling facilities, and the expansion of retail outlets and depots across Nigeria.

    “Our recent assessments reveal that the current downstream infrastructure in Nigeria can handle up to 5 million metric tonnes (MT) of LPG annually, indicating that we are prepared for increased production from both associated and non-associated gas fields within the country,” said Suresh Kumar, Managing Director of NIPCO Plc.

    Kumar called on the government to introduce incentives that would stimulate investment in gas processing, noting that NIPCO, which began operations in 2004, initially entered the industry as a marketer of petroleum products. However, the company’s long-term goal has always been to lead in the marketing and distribution of Liquefied Petroleum Gas (LPG).

    “Our strategy has always been driven by Nigeria’s abundant gas reserves, which total over 200 trillion cubic feet. We believe that LPG for domestic use and Compressed Natural Gas (CNG) for industrial and transportation purposes must be fully utilized to optimize gas consumption in the country,” Kumar said.

    He also highlighted NIPCO’s considerable investment in infrastructure, pointing out that the company has significantly expanded its LPG operations. “In 2008, we established an LPG facility in Apapa with a capacity of 5,000 metric tonnes. Today, that facility has grown to over 20,000 metric tonnes, thanks to strategic partnerships with our subsidiaries,” he explained.

    In addition, NIPCO has rolled out LPG tankers and built several stations across Nigeria to ensure easy access to cooking gas for households nationwide. While LPG is crucial for homes, Kumar emphasized that CNG will be key in powering industries and revolutionizing the transportation sector.

    Reflecting on NIPCO’s journey, he recalled that when the company entered the market, Nigeria’s domestic LPG consumption was around 50,000 metric tonnes per year. “In the past 16 to 17 years, we have witnessed tremendous growth. The market has expanded from 50,000 MT to approximately 1.5 million MT annually,” he said.

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    Despite this growth, Kumar acknowledged that there remains significant untapped potential, as less than 60% of Nigeria’s 200 million population currently uses LPG. “Our vision is to seize these opportunities and increase LPG consumption in Nigeria from 1.5 million MT to levels that reflect a population of over 200 million people,” he stated.

    He also stressed the need for collaboration with the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) and other stakeholders to eliminate gas flaring. “Substantial investments are required to capture and process flared gas, which would increase domestic LPG supply from the current 1.5 million MT to at least 5 million MT annually,” Kumar added.

    However, Kumar noted that the demand for LPG in Nigeria has been stagnant due to the high price of the product. “While current high prices have slowed consumption growth, this situation is temporary. We expect the market to correct itself as more players enter the gas processing sector,” he said, expressing confidence that the market will stabilize in the long term.

    Kumar urged the Federal Government to support local refineries, including the Dangote Refinery, in boosting domestic LPG production. “It is essential for the government to back these refineries so they can significantly increase LPG output. This will reduce retail prices and make the product more affordable for Nigerians,” he concluded.

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