Cooking Gas Prices Surge 114% in 16 Months, Crisis Looms

The devaluation and floating of the naira initiated by the Tinubu administration have exacerbated the situation, resulting in the naira trading at approximately ₦1,700 to a dollar, a significant decline from less than ₦700 in May 2023

Lagos, Nigeria – The price of Liquefied Petroleum Gas (LPG), commonly known as cooking gas, has surged dramatically from ₦700 per kilogram in June 2023, coinciding with President Bola Tinubu’s assumption of office, to an alarming ₦1,500 per kilogram in October 2024, marking a staggering 114% increase within just 16 months, according to reports from The PUNCH.

Factors Behind the Price Surge

The unprecedented rise in LPG prices is primarily linked to the deteriorating exchange rate, as the commodity is priced in dollars.

The devaluation and floating of the naira initiated by the Tinubu administration have exacerbated the situation, resulting in the naira trading at approximately ₦1,700 to a dollar, a significant decline from less than ₦700 in May 2023.

Suresh Kumar, the Managing Director and Chief Executive Officer of NIPCO Plc, highlighted that over 60% of cooking gas consumed in Nigeria is imported.

Speaking at the recent National Conference of the Nigerian Association of Liquefied Petroleum Gas Marketers 2024 in Lagos, Kumar emphasized the urgent need for increased local production of LPG. He pointed out that current domestic production accounts for less than 40% of the 1.5 million metric tonnes consumed annually.

“The government must encourage companies like Chevron to convert more of their propane output into butane, which is more suitable for domestic use,” Kumar stressed, acknowledging the significant reliance on imports as a contributing factor to rising prices.

Ongoing Challenges and Impacts

The rising costs of LPG are causing widespread concern among consumers and policymakers alike, with many fearing that the trend will continue due to ongoing fluctuations in the exchange rate and Nigeria’s heavy dependence on imported gas.

According to the National Bureau of Statistics (NBS), the average retail price for refilling a 5kg cylinder of LPG rose by 4.19% month-on-month from ₦6,430.02 in August 2024 to ₦6,699.63 in September 2024. This reflects a 59.90% increase compared to the same period last year when the price stood at ₦4,189.96 in September 2023.

In terms of regional disparities, the NBS report revealed that Rivers State recorded the highest average price for refilling a 5kg cylinder at ₦7,285.71, followed closely by Gombe at ₦7,271.88 and Borno at ₦7,089.72. Conversely, Kebbi State had the lowest price at ₦5,950, followed by Kano and Benue, with prices of ₦6,133 and ₦6,143, respectively.

A Broader Economic Context

As the nation grapples with the consequences of rising LPG prices, the effects extend beyond mere consumer hardship. The devaluation of the naira and the recent removal of fuel subsidies have compounded the challenges faced by many Nigerians.

The PUNCH reports a dramatic increase in LPG prices from around ₦300/kg in 2017 to the current ₦1,500/kg in October 2024. This surge, coupled with the financial strain imposed by these economic reforms, is driving many households to revert to traditional cooking methods, such as using firewood.

This shift raises significant concerns about Nigeria’s commitment to achieving clean cooking initiatives and reducing deforestation. According to Samuel Nwanze, the Executive Director and Chief Financial Officer of Heirs Energies, Nigeria requires approximately $7.5 billion to realize its clean cooking goals by 2030.

Health and Environmental Consequences

The implications of rising cooking gas prices are dire, particularly for women and children who are disproportionately affected by energy poverty.

The International Energy Agency (IEA) reported that at least 500,000 African women die prematurely each year due to cooking with traditional fuels like firewood and charcoal.

The lack of access to clean cooking methods not only endangers lives but also robs women of valuable time that could be spent pursuing education and professional opportunities.

“It is estimated that women can spend up to four hours a day collecting firewood, which significantly hinders their educational and professional aspirations,” the IEA stated. This harsh reality highlights the urgent need for policies that promote access to clean cooking solutions and reduce the economic burden on families.

State-by-State Price Analysis

Recent data from the NBS indicates significant variations in LPG prices across different states. For refilling a 12.5kg cylinder of LPG, the average retail price rose by 4.89% from ₦15,552 in August 2024 to ₦16,313 in September 2024. Year-on-year, this represents a staggering 76.41% increase from ₦9,247.40 in September 2023.

Rivers State again recorded the highest average price for refilling a 12.5kg cylinder at ₦17,993, followed by Gombe at ₦17,943 and Zamfara at ₦17,475. In contrast, Adamawa had the lowest average price at ₦13,983, with Nassarawa and Bauchi following at ₦14,938 and ₦15,000, respectively.

Regional Disparities

Analysis by zone further revealed that the South-East recorded the highest average retail price for refilling a 12.5kg cylinder at ₦16,957, followed closely by the South-West at ₦16,665. The North-East, however, offered the lowest prices, averaging ₦15,770.75.

The Way Forward

As the Nigerian government grapples with the ongoing crisis in LPG pricing, there are increasing calls for immediate action to address the underlying issues affecting supply and pricing. Stakeholders in the LPG market are urging the federal government to prioritize local production and reduce the nation’s dependency on imports.

Furthermore, experts emphasize the need for targeted interventions that will provide relief to consumers while promoting sustainable energy practices. Policies that incentivize the use of clean cooking technologies and encourage investment in local production facilities are critical for ensuring long-term energy security and accessibility.

In light of the ongoing challenges, it is imperative for the Nigerian government to take decisive steps to stabilize the LPG market, protect vulnerable populations, and work toward achieving the ambitious clean cooking targets set for the future.

Conclusion

The soaring prices of cooking gas in Nigeria not only reflect economic challenges but also highlight the urgent need for systemic change in the country’s energy policies.

As households struggle to afford essential cooking fuel, the government faces pressure to address the issues at hand, ensuring that all Nigerians have access to safe and affordable cooking energy.

The path forward must involve a commitment to local production, investment in clean energy solutions, and a focus on improving the livelihoods of millions impacted by these changes.

 

This article was created using automation technology and was thoroughly edited and fact-checked by one of our editorial staff members

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