Despite holding Africa’s largest proven gas reserves and recording rising gas production, household and industrial consumers are now faced with significant shortages of Liquefied Petroleum Gas, LPG, also known as cooking gas.
The development is also putting pressures on retail prices of the product.
Financial Vanguard findings showed that some producers are focused on exporting the product rather than meeting domestic demand.
Data obtained from the Nigerian Upstream Petroleum Regulatory Commission, NUPRC, showed that 62 per cent of the total gas output in the first two months of this year was exported, leaving only 38 per cent for domestic market.
Industry analysts said the lopsided supply, which had been in place during the years most Nigerians were not using gas for cooking, can no longer continue, adding that the supply structure was now destabilising domestic market.
Rising demand overshoots domestic supply
Financial Vanguard findings showed that demand has continued to outpace supply, according to the latest industry report, titled ”Nigeria LPG Production & Supply Matrix (2023-2026)”.
According to the report, estimated national consumption of cooking gas increased by 20 per cent to 1.8 million metric tonnes in 2026 from 1.5 million metric tonnes in 2023, while estimated national supply rose to between 1.55 million metric tonnes and 1.65 million metric tonnes in 2026.
This shortage is coming against the backdrop of increased production arising from the entry of Dangote Refinery into the supply end.
The report stated further: “The Nigerian LPG market has undergone a major structural transformation between 2023 and 2026. Historically dominated by imports and Nigeria LNG Limited, the market is increasingly being supplied by domestic gas-processing plants and refineries, particularly Dangote Petroleum Refinery, inland gas processors and NNPCL-linked facilities.”
The figures indicate that demand growth is outpacing supply expansion, despite rising domestic production and increased investment by major operators.
As a result of this supply-demand gap, retail prices in many parts of the country are now between N1,700 and N2,000 per kilogramme, up by over 80 per cent from average N1,100 in the first quarter of this year.
The dealers are saying the increases would continue in the months ahead as key problems cannot be resolved in short term.
Catalogue of constraints
The report warned that “cylinder penetration remains low. Distribution infrastructure remains inadequate. Marine terminal bottlenecks persist. Trucking costs significantly affect final retail prices. Exchange-rate volatility still influences imported LPG pricing.”
Experts give further insight
Despite the efforts of domestic suppliers, a review of reports by the NUPRC and the Nigerian Midstream and Downstream Petroleum Regulatory Authority, NMDPRA, showed that supply remains hindered by poor gas infrastructure, export priority over domestic supply, weak domestic gas pricing frameworks, insecurity and pipeline vandalism, inadequate investment, rising demand, foreign exchange volatility, limited storage capacity, regulatory inconsistencies and continued gas flaring.
An industry leader who pleaded anonymity, said: “Nigeria lacks adequate gas gathering, processing, storage and transmission infrastructure needed to move gas efficiently from production fields to consumers.
“This means that large volumes of gas produced in remote oil fields cannot be evacuated due to insufficient pipelines, processing plants and distribution networks.
“Many producers prefer exporting gas through LNG projects because export markets offer more attractive pricing and stable foreign exchange earnings than the domestic market. As a result, domestic consumers often struggle to access sufficient supply.
“Persistent crude oil theft, vandalism and insecurity in the Niger Delta continue to disrupt gas production and transportation. Attacks on pipelines and related facilities often force operators to shut down production, thereby reducing supply to domestic users.
“The gas sector requires billions of dollars in long-term investment, but uncertainty in policy implementation, regulatory bottlenecks and foreign exchange challenges have slowed capital inflows. Many critical gas projects have suffered delays or remain undeveloped.
“Domestic demand for LPG and natural gas has risen significantly due to population growth, urbanisation and government campaigns encouraging households to shift from firewood and kerosene to cleaner fuels. However, supply expansion has not kept pace with increasing demand.
“The depreciation of the naira has sharply increased the cost of imported LPG and gas-related equipment. Since Nigeria still imports a portion of its LPG requirements, exchange-rate instability directly affects pricing and availability.
“Nigeria’s LPG storage capacity remains inadequate compared to growing consumption levels. Insufficient coastal and inland storage facilities create supply disruptions whenever there are logistics delays, import challenges or production interruptions.
“Frequent policy changes, multiple regulatory agencies and implementation delays continue to create uncertainty in the sector. Operators say inconsistent fiscal terms and unclear regulatory frameworks discourage long-term planning and investment.”
He further stated that despite repeated commitments to end gas flaring, Nigeria still flares significant volumes of associated gas that could have been processed for domestic consumption.
Untold hardship for households, businesses
In their joint response, Barrister Edu Inyang, National President, Nigerian Association of Liquefied Petroleum Gas Marketers (NALPGMA), and Bassey Essien, Executive Secretary of the association, said: “This sad situation has brought untold hardship to millions of Nigerian households, small businesses, food vendors and low-income families who rely on LPG for daily cooking and livelihood.
“It is worrisome that the current situation is eroding the substantial progress made by the government in promoting clean energy usage in the country.
“Our members across the country face challenges sourcing LPG due to persistent supply shortages, high depot prices, logistics bottlenecks and rising operational costs.
“We observe that where the product is available, it is sold at rates far beyond the reach of average Nigerians.
“The current crisis is undermining years of progress achieved through federal government policies, public-private investments and awareness campaigns aimed at deepening LPG penetration and promoting clean cooking energy as a safer alternative to kerosene, charcoal and firewood in Nigeria.
“Many families are reverting to firewood and charcoal, despite the serious implications for public health, environmental degradation and deforestation.
“If urgent and coordinated action is not taken immediately, the current crisis could worsen food inflation, trigger job losses, reduce investor confidence and undermine Nigeria’s clean energy and climate commitments.”
They also called on “the Federal Government, the Ministry of Petroleum Resources, the Nigerian Midstream and Downstream Petroleum Regulatory Authority, NMDPRA, NNPC Ltd, domestic producers, terminal operators, international suppliers and all critical stakeholders in the LPG value chain to take urgent and coordinated steps to stabilise the market before the situation deteriorates further.”
Outlook remains uncertain
In an interview with Financial Vanguard, the National President of the Oil and Gas Service Providers Association of Nigeria, OGSPAN, Mazi Colman Obasi, said: “The outlook is not bright in the short and medium term for several reasons.
”First, the problems, especially poor infrastructure and limited investment, cannot be addressed easily. Second, they require huge capital and much longer timeframes to resolve.
“Other issues such as insecurity and pipeline vandalism, foreign exchange volatility, limited storage capacity, regulatory inconsistencies and continued gas flaring also require resilience, commitment and long-term policy consistency.”
Another industry expert warned that unless Nigeria aggressively addressed infrastructure deficits, improved domestic supply incentives and strengthened investment conditions, the country might continue to experience gas shortages, despite its enormous reserves and production potential.
He said: “The combined contribution of NLNG, Dangote, Kwale Hydrocarbon, NPDC Ologbo, Pan Ocean, Seplat, PNG Gas, Greenville and other processors has significantly boosted Nigeria’s cooking gas output.
“Nigeria now has the technical capacity to become largely self-sufficient in LPG supply, but additional gas-processing projects must be brought on stream, domestic gas infrastructure must be expanded, more storage terminals must be commissioned and the nation’s LPG adoption policies must be sustained.”
Analysts warned that unless Nigeria rapidly expanded gas-processing infrastructure, storage capacity and domestic supply incentives, the country might remain trapped in cooking gas poverty, despite its enormous gas wealth.
Data obtained from the National Bureau of Statistics indicated that the price of cooking gas rose by 335 per cent to N1,741 per kilogramme in 2026 from N400 per kilogramme in 2016, driven by limited supply and other market forces.
A breakdown showed that the price of the product increased to N500 per kilogramme in 2017 from N400 per kilogramme in 2016.
The data also showed that the price further rose to N600, N680, N800, N950, N900, N1,000, N1,450, N1,630 and N1,741 per kilogramme in 2018, 2019, 2020, 2021, 2022, 2023, 2024, 2025 and 2026, respectively
Is speaking because is a Northern , he will support is northern brother, but let me tell you I am an oil field worker, I know what is pengassan staffs ,is a good thing to fight for workers,did you know once become a senior staff you earn more money as a senior staff bro change your story for life
Mrchippychappy: At this point you might as well give him the entire country because "we owe it to him"
[I will like to learn more 08066664423quote author=Lalami3232 post=134249159] The heart of the average Nigerian is wicked, devilish, bad, black, horrible, demonic, terrible, evil and inhumane. Funny enough, this same man go dey say "our government is wicked". Sir/ma, abeg for the sake of your children, you have to hustle harder. Else, the shege wey your children go receive go be premium. Talking about doubling hustle, why not go online and get a tech skill, learn forex or crypto. Don't pour that sperm into a woman until you're sure say you don get what it takes to give your child/children the best life. Forget this rubbish theory of "pikin dey bring luck". What do I even know sef aside enlightening my fellow men nationwide with the good news
Oga double your hustle by acquiring a tech, forex or crypto skill and thank me later. For those of you who will want to quote me later about the particular tech skill, I will advise data science, cyber security or mobile app development.[/quote]
Blazetrailer: They are playing a game....only Atiku can win Northen votes more than Tinubu. He only needs two more things to send the clueless one packing from Aso rock come 2027.
1. Gain control of PDP 2. Align all other opposition and disgruntled APC members into one bloc.
[he has been in power since 1999,at same age with my kid sister 24 years of service....hmmmmmquote author=MadPolitician post=133499860]At this point, Orji Kalu is still in politics strictly for himself and himself alone. He is that senator that represents himself, his family and his business.There is no serious ideological fiber behind his "Kumbaya" brand of "anywhere belle face" politics. Basically, he wakes up in the morning and does whatever that feathers his own nest. And he has been on that lane for a while. Just that his later day desperation for high political positions is starting to make him throw caution to the wind, thereby laying bare for all to see, his lack of principles and morales. Abia people were really unlucky with him as their first civilian governor post 1999. More like Delta state and Ibori.[/quote]
[which force? I for like join police...quote author=Okortor post=132949108]Which yeye ban? 2012 I served in the bank and was retained before I later got enlisted into the military......[/quote]
Excited residents of Kano State on Saturday came out in their massive number to welcome former Vice President and 2023 PDP Presidential Candidate, Alhaji Atiku Abubakar to the State.
Atiku arrived Kano State to attend the wedding between former Governor Musa Rabiu Kwankwaso's daughter (Fatiha) and son of Alhaji Dahiru Mangal.
Many Political Analysts have said the heroic welcome shows the consistent popularity of Atiku in the north.
It is unclear if Atiku,who has been described as a seral contestant of presidential elections will also seek to participate in the 2027 presidential election after the 2023 defeat to APC's Bola Tinubu[/quote]
[I did My NYSC in kogi and My PPA was is local government Omala lga...i no him in person..quote author=Numerouno94 post=132893635]
Calm down. A former Kogi state governor was at a point duped by a fellow Nigerian residing in South Africa. The then governor wanted to buy a certain hotel, and the Nigerian man who was his middle man collected the money from the governor and bought the hotel in his own name instead of the governors name. Lol. It brought about a long legal battle but the middle man won the case because the hotel papers carried his name. One of the biggest hotel in SA then.
If ur a Kogit u will knw the governor involved. I won't mention names.[/quote]
Drella: That's less than 3k USD. Except he's heading towards an African country, he should shelve the idea of japa.
With the influx of questions like this, I strongly believe people underestimate the cost of japa. When they tell you people sell houses, land, valuable properties just to japa, do you think it's a fable?
[quote author=Urbanchampion I still have some of the magazine till datepost=116396332]I remember the hip hop world magazine, it was colourful. Ayọ̀ Animasahun has come a long way.[/quote]
Omooba77: Arsenal welcome Dundalk to the Emirates Stadium on Thursday evening looking to retain their 100% record in Group B.
The Gunners started their 2020-21 Europa League campaign with a hard-fought triumph against Rapid Vienna, while their Irish opponents lost to Molde by a 2-1 scoreline.
Despite the progress made under Mikel Arteta during the second half of last season, Arsenal are yet to find their best form during the early weeks of this campaign.
Just two victories have been recorded from their last half-a-dozen contests, both by 2-1 scorelines against Sheffield United and Rapid Vienna respectively.
Arteta will argue that the Gunners could have prevailed against Leicester City at the weekend had they not had a goal controversially ruled out by VAR, but the lack of response from the North London outfit will concern the Spaniard.
Pierre-Emerick Aubameyang's form has also been criticised of late with the Gabon international scoring just once in his last six appearances.
Like he did last week, Arteta may use this competition to give the versatile attacker an opportunity to get back on track, potentially from the substitutes' bench with Manchester United to come on Sunday.
After being required to come from behind in Vienna, Arteta will be hoping for a more routine evening against the minnows of the group.
Dundalk looked on course for an eye-catching win over Molde last week before the Norwegian side netted twice during a 10-minute spell in the second half.
Having also suffered defeat at the hands of Waterford on Sunday, it leaves Filippo Giovagnoli with a major job on his hands to lift his squad ahead of the trip to he 2019 runners-up.
Business › Re: Why Cooking Gas Will Remain Scarce, Expensive by Nicky042(m): 1:26am On Jun 09
