Marketers raise Alarm as Dangote moves to cut cooking gas prices

 

Marketers Raise Alarm as Dangote Moves to Cut Cooking Gas Prices



President of the Dangote Group, Aliko Dangote, has announced plans to slash the cost of Liquefied Petroleum Gas (LPG), commonly known as cooking gas, and hinted at the possibility of bypassing distributors to sell directly to consumers if prices remain high.

Dangote, speaking during a tour of his refinery in Lekki with guests from the Lagos Business School’s CGEO Africa group, expressed concern that current LPG prices are unaffordable for many Nigerians who still rely on firewood. He revealed that the refinery now produces around 2,000 tonnes of LPG daily, with a goal to increase supply and help make gas more accessible and affordable.

“We are trying to bring down the price and make it cheaper. If distributors refuse to cooperate, we’ll go straight to the market and sell directly to consumers,” Dangote warned.

He emphasized that this move is aimed at encouraging the transition from firewood and kerosene to cleaner energy sources like LPG.

Currently, LPG retails between ₦1,000 and ₦1,300 per kilogram in Nigeria. Dangote aims to drive this cost down as part of a broader effort to reduce energy poverty.

Industry Pushback

However, industry operators have pushed back, accusing Dangote of attempting to dominate the sector.

Godwin Okoduwa, former Chairman of the LPG and Natural Gas Downstream Group of the Lagos Chamber of Commerce and Industry, criticized the move as monopolistic. He argued that the LPG industry, which has grown from 70,000 metric tonnes in 2007 to over 1.3 million tonnes in 2022, was built through years of collaboration between stakeholders, including the government and private investors.

“I think the market should be protected to encourage continued growth,” Okoduwa said. “Dangote is entering a space that already exists because others laid the groundwork. He should respect that and engage in collaboration, not competition.”

Okoduwa warned that monopolizing the sector could discourage further investment. He urged Dangote to focus instead on expanding market reach — especially to underserved regions like the Northeast — and growing the industry’s capacity to 5 million tonnes annually.

Skepticism Over Direct Sales

Echoing similar concerns, Bassey Essien, Executive Secretary and CEO of the Nigerian Association of Liquefied Petroleum Gas Marketers, expressed doubt about Dangote’s plan to sell gas directly to end-users or significantly reduce prices.

“It’s not realistic,” Essien stated. “Has the refinery sold petrol directly to consumers at cheaper rates? The same challenges will apply here.”

Dangote is also expected to begin direct distribution of petrol, diesel, and aviation fuel nationwide in August, with 4,000 Compressed Natural Gas (CNG)-powered buses already procured for the initiative.

While Dangote’s intervention may promise lower prices for consumers, it has also triggered fears among existing operators about market fairness and sustainability — opening a new chapter in Nigeria’s ongoing energy discourse.



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