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Cooking gas costs rise amid Dangote adjustment, crude oil surge

Price of of cooking gas rose by 13.75% in May 2024

Fresh pressure is building on household energy costs as marketers on Monday warned that the price of Liquefied Petroleum Gas (cooking gas) may rise further after a fresh price adjustment by the Dangote Petroleum Refinery and shifting global crude oil trends.

The Nigerian Association of Liquefied Petroleum Gas Marketers said retail prices have already surged to about N1,000 per kilogramme, driven by higher ex-depot rates, rising logistics costs, and the knock-on effects of increasing crude oil prices.

This follows an increase in the Dangote refinery’s LPG ex-gantry price from between N760 and N800 last week to N825 per kilogramme on Monday, a move industry players say is likely to drive price adjustments across the downstream market.

Speaking on Monday, the association’s Publicity Secretary, Damilola Owolabi-Osinusi, said consumers should brace for higher prices at retail outlets nationwide.

She said, “Yes, definitely. The price of cooking gas will rise. The prices have already increased to N1,000 per kg at retail stations. This is because of the cost of logistics. It has increased too, haulage and other loading costs, particularly haulage. Even the Dangote refinery has increased its price. It’s N825 from Dangote as of today.”

Her remarks highlight a widening gap between ex-depot and retail prices, reflecting the cumulative impact of supply chain costs on what consumers ultimately pay.

She noted that, aside from the refinery’s price hike, increasing transportation costs—caused by higher diesel prices and operational challenges—are significantly aggravating the situation.

The latest increase is largely tied to the continued rise in global crude oil prices, which directly impacts LPG costs since both are products of hydrocarbon processing.

As crude prices surge on the international market, the cost of propane and butane—the key components of LPG—also goes up, pushing import parity prices higher and placing additional pressure on domestic supply.

Despite its status as a major gas producer, Nigeria still relies partly on imports and market-based pricing, leaving domestic LPG prices vulnerable to global energy shocks.

The projected increase is set to further pressure households already burdened by rising food and energy costs, with LPG remaining an essential cooking fuel for urban and semi-urban consumers.