Dangote Refinery Ramps Up LPG Output, Vows to Slash Prices as Dealers Push Back

Aliko Dangote, President of the Dangote Group, disclosed during a recent facility tour with members of Lagos Business School’s CGEO Africa that the refinery is currently producing 2,000 tonnes of LPG per day with the aim of ramping up output to address supply constraints and lower the cost of cooking gas.

Dangote stated that current LPG prices, which range between ₦1,000 and ₦1,300 per kilogram, are unaffordable for many Nigerians who rely on firewood and kerosene for cooking.

He pledged to bring down the cost to support a nationwide transition to cleaner energy sources.

“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 said.

However, stakeholders in the LPG sector have reacted strongly to the announcement, raising concerns about the risk of market concentration and the long-term implications of bypassing established distribution networks.

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, warning that it could undermine years of collaborative market development.

“I think it’s monopolistic. The LPG industry in Nigeria grew from 70,000 metric tonnes in 2007 to over 1.3 million tonnes in 2022 through collaboration with the Federal Government, NLNG, and private offtakers. Growth cannot be achieved through monopoly,” Okoduwa said.

He urged Dangote to focus on underserved regions such as the North-East, where LPG consumption remains significantly low due to poor infrastructure. “We will tell him thank you if he goes there to develop that market,” he added.

Also responding to the refinery’s plan, Bassey Essien, Executive Secretary and CEO of the Nigerian Association of Liquefied Petroleum Gas Marketers, questioned the feasibility of Dangote’s direct-to-consumer strategy.

“I 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 said.

Dangote’s plan comes amid broader reforms in Nigeria’s downstream sector, including his commitment to begin direct distribution of petrol, diesel, and aviation fuel by August 2025, using 4,000 CNG-powered buses to support national logistics.

The refinery, which is also expected to be a major supplier of refined products across West Africa, continues to generate debate over its role in reshaping domestic pricing structures and competition dynamics.

Analysts note that while Dangote’s LPG price reduction strategy may offer short-term relief for consumers, it also raises critical questions about market regulation, access, and fair competition within the sector.

The Federal Government has yet to comment on the potential regulatory implications of the refinery’s proposed direct intervention in the LPG retail segment.