November 27, 2018

Nigeria’s demand for cooking gas surges as price drops by 5%

By Udeme Akpan

THERE are indications that demand for Liquefied Petroleum Gas (LPG), has increased in Nigeria as price of the commodity dropped by 5 per cent.

A market survey in Lagos and its environs by Vanguard over the weekend showed that 12.5kg which went for N4, 000 in the second week of November, 2018 dropped to N3, 800.

Also, the price of 25kg which went for N8, 000 during the period dropped to N7, 600.

In an interview with Vanguard, some dealers stated that the development was as a result of increased supply of the product.

The Executive Secretary, Nigerian Association of Liquefied Petroleum Gas Marketers, Mr. Bassey Essien, who confirmed the situation also stated in a telephone interview that there has been massive supply from the foreign markets and the Nigerian Liquefied Natural Gas  (NLNG) Limited in the past few weeks.

Consequently, Essien, who ruled out the possibility of shortage and higher price during Christmas and the New Year celebrations, usually characterised by increased utilisation of the product, said the price may drop further in the domestic market.

He said: “Marketers do not welcome excessive fall in price as it could lead to losses for those who invested in the business much earlier at relatively high price regime.

“Instead of low price, it will be in the best interest of all stakeholders, including operators and users for the market to be stable.”

He said: “As an essential product, cooking gas should be affordable to an average Nigerian. But it is still relatively expensive because of the Value Added Tax (VAT), imposed on the locally sourced product.”


Meanwhile, NLNG disclosed that it started supply of LPG to the Nigerian domestic market in 2007, adding that the first NLNG LPG cargo into the domestic market was discharged at Apapa jetty on December 26.

It stated: “At the moment, NLNG has signed Sales and Purchase Agreements (SPAs) with 15 off-takers (all Nigerian companies), in which the company is committed to deliver up to 250,000 tonnes of LPG into the Nigerian market annually, in line with the commitment to grow the domestic LPG market.

“The LPG Domestic Supply Scheme, which has been an outstanding success, has led to a significant eduction in the end-user price of LPG in the domestic market.”


The company stated that it has concluded plans to increase domestic supply of LPG with a new vessel targeted at consolidating the company’s position in Nigeria.

The NLNG Limited indicated that the new LPG vessel will be built by E.A Temile and Sons Company Limited, a wholly Nigerian company, under a contract with Hyundai Mipo Dockyard, South Korea and chartered to NLNG.

The Managing Director and Chief Executive Officer of NLNG, Mr. Tony Attah, had remarked at the contract signing ceremony in Lagos that: “NLNG remains the single largest supplier of Liquefied Petroleum Gas (LPG) (over 50 percent) in Nigeria and looks to enable its expansion in future. We produce the LPG in our plant in Bonny, Rivers State and transport it by sea to Lagos from where it is distributed to every part of the country. This assures the product’s availability, accessibility, and affordability which is central to us as a company. NLNG’s domestic LPG intervention scheme aligns with its business focus of bringing energy to the world and helping to build a better Nigeria.

“A World Health Organisation (WHO) Report on Household Air Pollution and Health published in May 2018, affirms that about 4 million people die prematurely annually from illnesses attributable to air pollution from inefficient cooking practices using solid fuels and kerosene.

“And local data suggests that about 100,000 women and children die in Nigeria annually from the same causative factors. We believe that the expansion and strengthening of the DLPG market can help to stem this tide.”