Business

Tension Rises Among Gas Marketers as Dangote Targets Lower Cooking Gas Prices

Published by Akinwale Fakinlede on July 16th, 2025.

Tension Rises Among Gas Marketers as Dangote Targets Lower Cooking Gas Prices

Aliko Dangote

Aliko Dangote, President of the Dangote Group, has revealed plans to slash the cost of Liquefied Petroleum Gas (LPG), commonly known as cooking gas. He also hinted that if existing gas distributors resist this price reduction, his company may bypass them entirely and sell directly to consumers.

This proposal has sparked resistance from stakeholders in the gas industry, many of whom fear that Dangote’s strategy could lead to a market monopoly. On Monday, some industry players voiced their opposition, expressing concern that his entry into direct distribution could marginalize existing operators.

During a recent tour of the Dangote Refinery in Lekki, which hosted both local and international guests, Dangote emphasized that the current price of LPG is too high for many Nigerians—forcing households to rely on firewood for cooking. He disclosed that the refinery is now producing about 22,000 tonnes of LPG daily and intends to increase output for the local market.

In his remarks to members of the Lagos Business School CGEO Africa, Dangote said, “We currently produce around 2,000 tonnes of LPG per day. Although Nigeria is gradually shifting toward gas for cooking, prices remain too high. We’re working to bring these prices down so it becomes more accessible.”

He warned that if distributors fail to adjust prices downward, the company would begin selling directly to consumers, encouraging a shift from firewood and kerosene to LPG.

This initiative comes as Dangote plans to begin the direct distribution of petrol, diesel, and aviation fuel across the country by August, using 4,000 CNG-powered buses to support the effort.

Currently, LPG prices range between ₦1,000 and ₦1,300 per kilogram, but Dangote is confident these rates can be reduced significantly to ease consumer burden.

Industry Pushback

Despite the cost-saving promise, the move has not been welcomed by everyone in the sector.

Godwin Okoduwa, a former chairman of the LPG and Natural Gas Downstream Group at the Lagos Chamber of Commerce and Industry, criticized the plan as a monopolistic attempt to dominate the market.

He highlighted that Nigeria’s LPG sector had grown from a modest 70,000 metric tonnes in 2007 to over 1.3 million tonnes by 2022—largely due to collaborative efforts involving government agencies, private investors, and NLNG.

Okoduwa argued that progress in the sector should not be undermined by a single dominant player, stating, “We didn’t reach these numbers by accident. It took years of investment, partnership, and trust. Dangote shouldn’t disregard the foundation others have built.”

He added that while the billionaire’s investment is commendable, the industry would benefit more from collaboration than competition. “Let’s grow the market together. We’re still far behind in per capita LPG usage compared to countries like South Africa, Morocco, and Tunisia.”

His advice to Dangote? Focus on expanding access, particularly in under-served regions like the Northeast, rather than undercutting existing players.

Bassey Essien, CEO of the Nigerian Association of Liquefied Petroleum Gas Marketers, also expressed skepticism. He questioned the feasibility of Dangote’s plan, citing the ongoing challenges in the petrol market.

“I don’t see how direct sales to consumers or drastic price cuts will work in practice. Look at petrol—has the refinery been able to sell it directly to the public at a cheaper rate?” Essien said.