Dangote’s Cooking Gas Price Cut Plan Sparks Monopoly Fears Among Operators

President of Dangote Group, Alhaji Aliko Dangote, has announced plans to reduce the cost of Liquefied Petroleum Gas (LPG), commonly known as cooking gas, and warned that his company may begin direct sales to consumers if existing distributors resist efforts to lower prices.

However, the announcement has stirred controversy among industry stakeholders, with several operators accusing Dangote of attempting to monopolize the LPG sector. Critics argue that bypassing established distribution networks could stifle market competition and undermine years of collaborative growth.

During a recent tour of the Dangote Refinery in Lekki, Lagos, with local and international guests, Dangote decried the high cost of cooking gas, saying it remains unaffordable for many Nigerians who still rely on firewood for cooking. He revealed that the refinery currently produces about 22,000 tonnes of LPG daily and is scaling up output to serve the Nigerian market.

While addressing members of Lagos Business School’s CGEO Africa, Dangote emphasized his commitment to making cooking gas more accessible: “We are producing about 2,000 tonnes of LPG daily. Nigeria is gradually shifting to LPG, but it’s still expensive. If distributors don’t lower prices, we will sell directly to consumers to help reduce reliance on firewood and kerosene.”

The PUNCH reports that Dangote also plans to begin direct distribution of petrol, diesel, and aviation fuel across Nigeria starting August, using a fleet of 4,000 compressed natural gas (CNG)-powered buses. Currently, cooking gas retails between ₦1,000 and ₦1,300 per kilogram.

Former Chairman of the LPG and Natural Gas Downstream Group of the Lagos Chamber of Commerce and Industry, Godwin Okoduwa, criticized the move as monopolistic. He noted that the LPG market had grown from 70,000 metric tonnes in 2007 to over 1.3 million metric tonnes in 2022 due to collaborative efforts among government agencies, private investors, and stakeholders.

Okoduwa stressed that sustainable growth can only be achieved through cooperation, not domination. “We should focus on expanding the market rather than allowing one player to control it. Dangote should acknowledge the groundwork laid by others and work with them to grow the market rather than disrupt it.”

He also challenged Dangote to focus on underdeveloped regions like the Northeast, where LPG use is minimal, by building infrastructure that would truly boost nationwide adoption.

Echoing these concerns, Bassey Essien, Executive Secretary/CEO of the Nigerian Association of Liquefied Petroleum Gas Marketers, questioned the feasibility of Dangote’s plan to sell gas directly to consumers or significantly crash prices. “It’s unrealistic,” Essien said. “If petrol hasn’t been directly sold to individuals at lower prices, how can cooking gas be any different?”