President of Dangote Group, Alhaji Aliko Dangote, has announced intentions to slash the price of Liquefied Petroleum Gas, commonly known as cooking gas, and warned that he may begin direct sales to consumers if distributors fail to reflect the price reduction.
Speaking during a recent tour of the Dangote Refinery by local and international guests, Dangote described the current cost of cooking gas as unaffordable for many Nigerians, particularly those who still rely on firewood.
He revealed that the refinery is currently producing 22,000 tonnes of LPG daily and is scaling up distribution to support Nigeria’s shift toward gas-powered cooking.
Dangote said, “The one that we didn’t write, which you must have seen, is LPG. Currently, we do LPG of about 2,000 tonnes per day. You know Nigeria is gradually moving to the usage of LPG. But I believe it is expensive, but right now we’re trying to bring down the price and make it cheaper.”
However, some industry operators have opposed the plan, accusing Dangote of attempting to dominate the LPG market.
The dealers, who raised concerns on Monday, warned that the move could lead to a monopoly in the sector.
Currently, the price of cooking gas ranges between N1,000 and N1,300 per kilogramme, as Dangote pledged to bring down the cost to make it more affordable for Nigerians.
However, in an interview with the former Chairman of the LPG and Natural Gas Downstream Group of the Lagos Chamber of Commerce and Industry, Godwin Okoduwa, described the plan as monopolistic.
Okoduwa voiced concern that Dangote should recognise the efforts of investors who have grown the LPG market from 70,000 metric tonnes in 2007 to over 1 million metric tonnes by 2022.
He stressed that progress in the sector should be driven by collaboration rather than monopolistic control.
“I think it’s monopolistic. I think a market should be protected to encourage growth. The LPG industry in Nigeria grew from 70,000 metric tonnes in 2007 to over 1.3 million tonnes in 2022. That was done by collaboration — collaboration with the Federal Government, the NLNG, and offtakers. Everything was done in collaboration. It grew from 70,000 to 250 to 800, and now over a million,” Okoduwa said.
He emphasised that true growth in the sector can only come through collaboration, not through monopolistic control.
“Today, we are just under 5kg or 6kg per capita consumption in terms of LPG. Other countries are doing much more. South Africa is doing double digits, Morocco and Tunisia are doing double digits. We can do much more.
“So, we should, as an industry and as a country, focus on how to grow the LPG industry and not allow someone (to frustrate the players). Yes, he has invested; yes, it’s a capital economy, but he should not be allowed to frustrate the players.
“There are people who have spent money, spent resources, even business and development, and someone just comes in to reap from the work that has been done. I’m sure he wouldn’t have built if there had not been an existing market. The work has been done, he should respect the market and let us grow. It shouldn’t be a zero-sum strategy. It should be collaborative,” he said.
He noted that while Dangote holds a significant advantage, he should prioritise collaboration over control.
“My advice to him is that the pie can be bigger. The Nigerian market is about 1.3 million tonnes. The Nigerian LPG market can be 5 million tonnes. He should work towards collaboration rather than competition, because at the end of the day, everybody benefits,” he added.
Also, the Executive Secretary and CEO of the Nigerian Association of Liquefied Petroleum Gas Marketers, Bassey Essien, expressed doubt over Dangote’s ability to sell gas directly to consumers or significantly reduce the price.
“I am saying that it’s unrealistic. What is the position with PMS? Has the refinery been able to sell petrol directly to you and me into our cars at a very cheap rate?” Essien asked.
