Alhaji Aliko Dangote, President of the Dangote Group, has revealed plans to reduce the cost of Liquefied Petroleum Gas (LPG), commonly known as cooking gas.
He also pledged to begin direct sales to consumers if current distributors fail to pass on the expected price reduction.
However, industry stakeholders have pushed back against the proposal, accusing Dangote of attempting to dominate the LPG market.
On Monday, dealers voiced concerns, warning that the move could lead to a monopoly in the sector.
During a recent tour of his refinery with both local and international guests, Dangote emphasized that the prevailing cost of cooking gas is too high and beyond the reach of average Nigerians, many of whom are forced to rely on firewood.
He revealed that the refinery currently produces 22,000 tonnes of LPG daily and is steadily increasing output to meet the growing demand in the Nigerian market, especially as more households transition to gas for cooking.
While addressing members of the Lagos Business School’s CGEO Africa group during a visit to the Lekki refinery, Dangote Said, The one that we didn’t write, which you must have seen, is LPG. Currently, we do LPG of about 22,000 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 warned that “if the distributors are not trying to bring it down, we’ll go directly and sell to the consumers, so that people will now transit from firewood or kerosene to LPG for cooking.”
Dangote plans to begin the nationwide direct distribution of petrol, diesel, and aviation fuel to marketers in August, using 4,000 CNG-powered buses for the rollout.
Currently, cooking gas sells for between ₦1,000 and ₦1,300 per kilogram, but Dangote has promised to reduce the price to make it more accessible.
Operators in the LPG market are reportedly unhappy with his intention to disrupt the sector.
In an interview, Godwin Okoduwa, former Chairman of the LPG and Natural Gas Downstream Group of the Lagos Chamber of Commerce and Industry, described the move as monopolistic.
He emphasized that Dangote should acknowledge the role of investors who expanded the market from 70,000 metric tonnes in 2007 to over 1 million metric tonnes in 2022, and urged for collaboration rather than 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 emphasized that growth comes from collaboration, not monopoly.
“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.
The gas expert recommended that while Dangote holds a significant advantage, he should opt for a collaborative approach.
”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.
When informed that Dangote’s primary goal is to make cooking gas affordable for all and reduce reliance on firewood, Okoduwa responded, “I have news for him. He should go to the Northeast, where you have the least consumption of LPG. He should go to the Northeast and start developing the LPG infrastructure there. I think we will tell him thank you for that.”
Likewise, Bassey Essien, Executive Secretary and CEO of the Nigerian Association of Liquefied Petroleum Gas Marketers, expressed doubt over Dangote’s ability to sell gas directly to consumers or significantly reduce the price.
”l 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.
The refinery, poised to become a key supplier of refined products across West Africa, remains at the center of ongoing debate over its potential impact on domestic pricing and market competition.
Experts observe that while Dangote’s strategy to lower LPG prices could bring temporary relief to consumers, it also sparks important concerns around regulation, market access, and fair competition in the industry.
So far, the Federal Government has not addressed the possible regulatory consequences of the refinery’s plan to enter the LPG retail market directly.
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