President of Dangote Group, Alhaji Aliko Dangote, has announced plans to reduce the price of Liquefied Petroleum Gas (LPG), popularly known as cooking gas, and begin direct sales to consumers if existing distributors fail to reflect the planned price cut.
The announcement, made during a tour of the Dangote Refinery in Lekki by members of the Lagos Business School CGEO Africa and other stakeholders, has sparked reactions from operators in the LPG market, who fear the move could lead to market domination.
Speaking at the refinery, Dangote described the current price of LPG—currently ranging between N1,000 and N1,300 per kilogramme—as unaffordable for average Nigerians who often resort to firewood for cooking. He disclosed that the refinery is producing 2,000 tonnes of LPG daily, with plans to scale up production to 22,000 tonnes for distribution across the country.
“Nigeria is gradually shifting to LPG usage, but the product is still too expensive,” Dangote said. “If the distributors refuse to bring down the price, we will sell directly to consumers so they can switch from firewood or kerosene to gas.”
Dangote’s direct intervention in the LPG market is part of a broader strategy that includes the distribution of petrol, diesel, and aviation fuel, expected to begin in August. The company has reportedly procured 4,000 CNG-powered buses to support this effort.
Market Operators React
Despite the potential benefits to consumers, industry players have pushed back on Dangote’s plan, expressing concern over what they describe as an attempt to monopolise the LPG sector.
In an interview, the former Chairman of the LPG and Natural Gas Downstream Group of the Lagos Chamber of Commerce and Industry, Godwin Okoduwa, labelled the move as monopolistic. He acknowledged Dangote’s investment but argued that the industry’s growth has been a collective effort over the years.
“The LPG market grew from 70,000 metric tonnes in 2007 to over 1.3 million tonnes in 2022 due to collaboration among stakeholders — the Federal Government, NLNG, and offtakers,” Okoduwa said. “Growth comes from collaboration, not monopoly.”
He added that Nigeria still lags behind in LPG consumption compared to countries like South Africa, Morocco, and Tunisia, and urged a cooperative approach. “The market can grow to 5 million tonnes. Dangote should join forces with existing players instead of sidelining them,” he said.
Reacting to Dangote’s claim of making gas more accessible to low-income earners, Okoduwa advised the billionaire to focus on underserved regions.
“He should go to the Northeast, where LPG usage is lowest, and help develop the infrastructure there. That would be a meaningful contribution,” he said.
Similarly, the Executive Secretary/CEO of the Nigerian Association of Liquefied Petroleum Gas Marketers, Bassey Essien, cast doubt on the feasibility of Dangote’s direct-to-consumer model or a drastic price cut.
“I think it’s unrealistic. Has the refinery been able to sell petrol directly to motorists at a reduced rate? The same challenges will apply to LPG,” Essien remarked.
ADEOLA KUNLE
