The rising cost of Liquefied Petroleum Gas (LPG), popularly known as cooking gas, in Nigeria, has become a source of concern for many households and businesses, especially as more than 90,000 women and children die from dirty sources of fuel in the country annually.
On Wednesday, the Federal Government, in a bid to curb the surging prices, announced a halt to the export of locally produced cooking gas, from November 1, 2024.
Earlier reports from BusinessDay show that the average cost of refilling a 12.5kg cylinder of cooking gas rose by N5,099.46 in just one year, from N9,162.11 in July 2023 to N14,261.57 in July 2024.
Despite government interventions, prices have continued to fluctuate, with recent figures indicating an increase to N1,500 per kilogram, up from the previous average of N1,100–N1,250 per kg.
Read also: Price of cooking gas increased by 55.66% in one year – NBS
Reasons for rising cooking gas prices
Global market fluctuations
Nigeria, despite being an oil-producing country, imports a significant portion of its LPG. The international market price of gas is highly volatile, and recent global factors, such as disruptions in supply chains, increased demand in other countries, and geopolitical tensions, have driven up prices. The higher cost of importing LPG has directly impacted prices in Nigeria.
FX challenges
One of the critical factors affecting the price of cooking gas in Nigeria is the fluctuating value of the naira against major international currencies, especially the US dollar.
Olatunbosun Oladapo, the Nigerian Association of Liquefied Petroleum Gas Marketers (NALPGAM), said the major reason for the hike in cooking gas retail prices is FX challenges.
He tasked the FG to sort out the challenges of naira devaluation as it has made the prices of commodities go up.
“Government must deal with the issue of FX and alleviate the suffering of the masses by providing palliatives and reducing taxes and levies,” he said.
High demand with limited local supply
In recent years, the demand for cooking gas has increased due to its clean-burning properties and government encouragement for its use over other fossil fuels.
However, domestic production of LPG is not enough to meet this growing demand. With limited local supply, Nigeria depends on imports to bridge the gap, further exposing prices to global market trends.
Logistical and infrastructure constraints
The infrastructure needed for efficient LPG distribution across Nigeria is still underdeveloped. Inadequate storage facilities, poor transport networks, and high transportation costs, particularly for delivering gas to remote areas, all contribute to the rising cost of cooking gas.
These logistical challenges often result in additional expenses for suppliers, which are passed on to consumers.
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