The price of cooking gas in Nigeria has spiked to a record N1,000 per kilogram, up 33% from N750 just two months ago, sparking fears of impending scarcity across the country.
Experts attribute the astronomical price surge to a perfect storm of factors: naira devaluation, limited LPG storage infrastructure, and the concentration of port operations in Lagos, Edo, Delta, and Cross Rivers.
Sources say major gas importers are hoarding supplies, betting on further price hikes. Charter rates for LPG vessels have also shot up globally due to tight ship availability. Rates could jump from today’s $70,500/day to $206,750/day in October and $284,750/day in November, as per Bloomberg.
Back in August 2022, the Nigerian Association of Liquefied Petroleum Gas Marketers (NALPGAM) warned of potential cooking gas price increases tied to rising forex rates and international market trends. NALPGAM’s President, Olatunbosun Oladapo, urged government action to boost local LPG production and prevent middlemen from exploiting pricing.
“The price increase is dire; consumers, distributors, and retailers are feeling the pain. It’s unfortunate that prices keep rising while Nigerians struggle,” Oladapo lamented.
The sudden gas price spike has forced many households to switch back to firewood, charcoal, and sawdust for cooking. Experts caution that the current shortfall could degenerate into a full-blown crisis without urgent interventions.
NALPGAM blames the price hikes on climbing global prices, high taxes, costly LPG ship charters, the forex crunch, and naira devaluation.
With Nigeria’s per capita LPG demand growing for power generation and vehicles, inadequate bulk storage capacity means prices will keep rising, reckons Kelvin Emmanuel, CEO of Diary Hills Limited.
“LPG scarcity caused by insufficient bulk terminals means rising prices per kg as importers hoard and speculate due to FX instability,” Emmanuel stated.