The price of Liquefied Petroleum Gas (LPG), popularly known as cooking gas, has surged by no less than 45.8 per cent in many parts of the country despite the federal government’s restriction on the export of the commodity.
The persistent rise in the price of cooking gas is putting further financial strain on households, whose incomes are already heavily burdened by high inflationary pressure.
LEADERSHIP recalls that the minister of state, Petroleum Resources (Gas), Ekperikpe Ekpo, had announced a ban on the export of LPG effective November 1, 2024.
This decision was aimed at stabilising domestic supply and addressing the rising costs of LPG, thereby alleviating economic hardships for Nigerians. The directive, issued during a stakeholder meeting on October 22, 2024, where Ekpo emphasised the need for a domestic pricing framework and the development of facilities for blending and storage within the next year
However, LEADERSHIP checks indicate that despite the order, consumers nationwide are reeling from the surge, with prices increasing by over 45.8 per cent in some areas in November.
One kilogramme now sells for as high as N1,550 in many parts, translating to N19,375 for the 12.5 kg cylinder of cooking gas.
A mother of three, Nkechi Okeke, said the escalating cost has turned a basic necessity into a luxury.
“Barely two months ago, I bought a 12.5kg cylinder for N16,250. Today, they’re asking for N19,500. How are we supposed to survive?” she said, standing outside her roadside kiosk.
Many Nigerians have been relying on LPG for cooking, currently reconsidering due to the persistent price hike.
“I never thought I would be paying this much for gas to cook my meals,” another consumer, Imeh Edet said. “Every month, the price goes up, and we’re being forced to use less and less. It’s tough.
“We’ve started using charcoal again, but it’s slower, dirtier, and more stressful. My children complain about the smoke, and it feels like we’re going backwards,” she said.
It’s not just families that are feeling the pinch. Small businesses that depend on cooking gas are facing an existential crisis.
Adewale Ogunleye, who runs a roadside food joint in Abuja, has seen his profit margins shrink dramatically.
“Cooking gas is my biggest expense. If the prices keep going up, I’ll have to increase the prices of food, and customers won’t come,” he said.
For Ogunleye, the decision to switch to firewood is bittersweet. “It’s cheaper, but it takes more time and affects the taste of the food. Plus, it’s bad for the environment.”
Data from National Bureau of Statistics (NBS) show the average retail price for refilling a 12.5kg cylinder of LPG increased by 58.68 per cent from N10, 545.87 in October 2023 to N16, 734.55 in October 2024, putting additional strain on households already grappling with high inflation and economic challenges.
The average cost of refilling a 5kg cylinder of cooking gas rose by 3.23 per cent in October to N6,915.69, up from N6,699.63 in September. On a year-on-year basis, the increase is even more, 51.58 per cent higher than the N4,562.51 recorded in October 2023.
The average price rose by 2.58 per cent to N16, 734.55 in October, compared to N16,313.43 in September.
Households in Borno bear the brunt, paying the highest price for a 5kg cylinder at N7,939. Rivers State tops the charts for 12.5kg cylinders, with residents shelling out N17,895 on average.
In contrast, residents of Katsina pay the lowest prices, N6,270, for a 5kg refill and N14,725 for a 12.5kg refill.
These regional differences highlight the uneven economic pressures faced by Nigerians, depending on where they live.
The NBS report revealed that the North-East region recorded the highest average price for refilling a 5kg cylinder at N7,319.03, while the South-South led for 12.5kg cylinders at N17,114.67.
The North-West and North-Central zones recorded the lowest average prices for 5kg at N6,703.95 and 12.5kg at N16,411.19 respectively.
The government’s export ban, announced last month, was intended to prioritise local consumption of LPG and reduce dependency on imports. Nigeria, despite being a significant gas-producing nation, has historically imported a substantial portion of its domestic LPG needs due to limited local processing and storage capacity.
“While the ban on exports was intended to ensure that domestic demand is met, the reality is that we are facing increasing production costs,” explained Nathaniel Adebayo, an economist and energy analyst at Sofidam Capital.
“Gas prices are closely tied to international market trends. The rising cost of crude oil, geopolitical tensions in key oil-producing regions, and transportation bottlenecks are all playing a part in pushing up prices.”
Furthermore, despite the export freeze, domestic distribution networks are still struggling with inefficiencies, leading to higher costs for local suppliers.
“Even if gas isn’t leaving the country, the infrastructure to get it to consumers at an affordable price is broken,” said Adebayo.
Last month, the Nigerian government said it was exploring partnerships with international oil giants, Chevron and ExxonMobil, in a bid to alleviate the persistent cooking gas shortages and soaring prices.
Chief executive officer of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), Farouk Ahmed, said this strategic move aims to bolster the domestic gas supply and provide much-needed relief to Nigerian households.
“We have been engaging stakeholders on the domestication of Liquefied Petroleum Gas (LPG) produced in-country by producers, especially Chevron Nigeria Limited (CNL) and Mobil Producing Nigeria (MPN), similar to Nigerian Liquefied Natural Gas (NLNG), which has domesticated 100 percent of its Butane production since the year 2022,” Ahmed said at 2024 OTL Africa Downstream Energy Week in Lagos recently.