The price of cooking gas, also known as liquefied petroleum gas (LPG), has been rising all over Nigeria even after the federal government recently banned exports in an effort to stabilize the domestic supply.
With prices rising by more than 45.8% in some places, consumers throughout the country feel the spike’s effects.
The rising expense has made a fundamental requirement into a luxury for Sophia Egede, a single mother of three.
“Last month, I purchased a 12.5kg cylinder for N12,000. Today, they are asking for N17,500. What are our chances of surviving?” She remarked as she stood outside her container store.
Like many Nigerians, Mabel Akinbode cooks using LPG, but the recent price increase has made her reevaluate her alternatives.
“I never thought I would be paying this much for gas to cook my meals,” she complained. “Every month, the price rises, and we are obliged to use less and less. It’s challenging.”
She continued, “We’ve started using charcoal again, but it’s slower, dirtier, and more stressful. My kids moan about the smoke, and I feel like we’re going backward.”
Families are not the only ones suffering. Cooking gas-dependent small companies are in a state of existential crisis.
The profit margins of Adewale Ogunleye, who owns a roadside Amala restaurant in Abuja, have significantly decreased.
“My largest expense is cooking gas. If prices continue to rise, I will have to raise food prices, and customers will not come,” he explained.
The choice to use firewood is bittersweet for Ogunleye. Although it’s less expensive, it takes longer and impacts the food’s flavour. Furthermore, it harms the ecosystem.
The average retail price for refilling a 12.5 kg cylinder of LPG rose by 58.68 percent from N10, 545.87 in October 2023 to N16, 734.55 in October 2024, according to data sourced from the National Bureau of Statistics (NBS). This increase further burdens households already facing high inflation and financial difficulties.
Refilling a 5 kilogramme cooking gas cylinder cost N6,915.69 on average in October, up 3.23 percent from N6,699.63 in September. The gain is considerably greater year-over-year, rising 51.58 percent over the N4,562.51 reported in October 2023.
The average price increased 2.58 percent in October to N16, 734.55 from N16,313.43 in September.
Borno households are hardest hit, spending the most (N7,939) for a 5kg cylinder. Additionally, Rivers State leads the nation in sales of 12.5 kilogramme cylinders, with average prices of N17,895.
On the other hand, residents of Katsina pay the lowest prices, paying N14,725 for a 12.5kg refill and N6,270 for a 5kg refill.
These regional variations draw attention to the varied economic constraints that Nigerians experience based on their place of residence.
According to the NBS study, the South-South region led for 12.5kg cylinders at N17,114.67, while the North-East region had the highest average price for refilling a 5kg cylinder at N7,319.03.
The lowest average prices were found in the North-West and North-Central zones for 5 kg at N6,703.95 and 12.5 kg at N16,411.19, respectively.
Ban On Exports
The government’s export restriction, which was declared last month, aimed to lessen reliance on imports and prioritise local LPG consumption. Nigeria has historically imported a large amount of its domestic LPG needs because it lacks processing and storage capacity, even though it is a major gas-producing country.
Experts Point To Multiple Variables For The Surge.
While the export freeze was intended to ensure that domestic demand is met, the reality is that we are facing rising production costs,” said an economist and energy expert at Sofidam Capital.
“Gas prices are closely related to international market developments. The rising cost of crude oil, geopolitical concerns in key oil-producing regions, and transportation bottlenecks are all contributing to higher prices.”
Additionally, domestic distribution networks struggle with inefficiency despite the export freeze, which drives up prices for local producers.
“Even if petrol isn’t leaving the country, the infrastructure to get it to consumers at an affordable price is broken,” the Economist added.
To address the ongoing cooking gas shortages and skyrocketing costs, the Nigerian government announced last month that it was looking into joint ventures with global oil behemoths Chevron and ExxonMobil.
According to Farouk Ahmed, CEO of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), this calculated action is intended to support the country’s gas supply and give Nigerian households much-needed respite.
At the 2024 OTL Africa Downstream Energy Week in Lagos, Ahmed stated, “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).” This is comparable to Nigerian Liquified Natural Gas (NLNG), which has domesticated all of its Butane production since 2022.”
