President of the Dangote Group, Alhaji Aliko Dangote, has declared plans to crash the price of Liquefied Petroleum Gas (LPG), otherwise known as cooking gas, while threatening to bypass distributors and sell directly to consumers if middlemen hinder affordability.
Speaking during a tour of his Lekki refinery with members of the Lagos Business School’s CGEO Africa, Dangote said his company currently produces about 2,000 tonnes of LPG daily, with plans to increase output to meet rising demand as Nigerians gradually transition from firewood and kerosene to gas.
“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,” Dangote said.
He warned that if distributors fail to pass on the price cuts to consumers, the company will “go directly and sell to the consumers, so that people will now transit from firewood or kerosene to LPG for cooking.”
Currently, cooking gas retails between ₦1,000 and ₦1,300 per kilogramme across major cities.
However, Dangote’s bold move has met stiff resistance from existing operators in the LPG sector who view his direct-to-consumer model as a monopolistic strategy.
Former Chairman of the LPG and Natural Gas Downstream Group of the Lagos Chamber of Commerce and Industry, Godwin Okoduwa, said the market must be protected to encourage continued growth.
“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,” he said.
Okoduwa warned that Dangote risks undermining the contributions of those who built the LPG sector over the past decade.
“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. He should respect the market and let us grow. It shouldn’t be a zero-sum strategy. It should be collaborative,” he added.
While acknowledging Dangote’s market dominance, Okoduwa urged him to embrace industry-wide cooperation: “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 also challenged Dangote to focus on under-served areas like the North-East: “He should go to the Northeast and start developing the LPG infrastructure there. I think we will tell him thank you for that.”
On his part, Executive Secretary of the Nigerian Association of LPG Marketers, Bassey Essien, questioned the realism of Dangote’s plan.
“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?” he queried.
This debate comes as Dangote’s refinery also prepares to begin nationwide direct sales of petrol, diesel, and aviation fuel in August, with 4,000 CNG-powered buses set for rollout.
Whether his push into direct LPG retail disrupts or elevates the market remains to be seen.
