Dangote’s LPG Price Cut The LPG In Nigeria Perspective

The new depot price for LPG/cooking gas has gone down from ₦810 to ₦760 per kilogram and has been widely celebrated as a move that will make cooking gas more affordable for Nigerians (Read more here). While this is undoubtedly a welcome development, LPG in Nigeria believes it’s essential to look beyond the headlines and examine what this really means for the broader LPG market and end-users.

At first glance, the refinery’s price cut is a relief for households and businesses struggling with the high cost of living. It represents a sign of hope for price stability in an industry often affected by supply shocks and market speculation. However, as we’ve consistently highlighted in our analyses, Dangote’s refinery price is only one part of the complex pricing puzzle. In reality, Dangote does not control retail or depot-level prices. The refinery sells LPG to licensed offtakers who are independent marketers, who then determine their own selling prices based on logistics, transportation, storage, and distribution costs. These offtakers compete with one another at various depots, meaning that price differences are inevitable across locations.

Another key factor often overlooked is the cost of transportation and handling. Depots that rely on supply from the Nigeria LNG (NLNG) or Bonny River Terminal (BRT) face higher marine transport and operational costs, which significantly raise their landing prices. As a result, even when Dangote sells at reduced prices, many other depots are unable to match those rates immediately due to logistical and infrastructural realities.

From our perspective at LPG in Nigeria, the real challenge lies in creating a transparent, efficient, and well-coordinated supply chain. Without this, price reductions at the refinery level will only have a limited impact on the prices paid by consumers at filling stations and local refilling points. The lack of unified communication and data-sharing across the LPG value chain also contributes to misinformation and market speculation, both of which hurt end users.

To truly stabilize  prices (even if it cannot be uniform due to the free market) and make LPG affordable across Nigeria, we believe that the industry needs:

A transparent pricing and supply coordination system to ensure depot operators and marketers align with refinery output realities.

Improved inland transportation and storage infrastructure, particularly in northern and rural regions.

Collaboration between private sector players and regulators, ensuring that market efficiency doesn’t come at the cost of consumer welfare.

The ongoing price adjustments by Dangote Refinery demonstrate leadership and market responsiveness, but sustainable affordability will depend on how the rest of the LPG ecosystem adapts. As the refinery continues to shape the market, we must also work toward a more integrated and transparent LPG distribution framework, one that benefits not just the industry, but every Nigerian household.

At LPG in Nigeria, our mission remains to provide clear insights into these developments, advocate for policy and structural reforms, and support the growth of a reliable, inclusive LPG market. Dangote’s actions are a positive step forward but achieving true affordability and accessibility will require collective effort, data transparency, and smarter coordination across the entire LPG value chain.

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Oluwabukola Jimoh

Oluwabukola Jimoh is a dynamic academic writer and captivating energy blogger. She is able to delve into intricate subjects with an insatiable thirst for knowledge, crafting thought-provoking essays that engage and enlighten her readers.