When Aliko Dangote, President of Dangote Group announced on Monday that his company will start selling LPG directly to Nigerians, the move shakes up a market that has been mired in high prices and distributor resistance. The declaration came during a tour of the Dangote Refinery located in Lekki, Lagos, Nigeria. With cooking‑gas prices hovering between N1,000 and N1,300 per kilogram, many households still rely on firewood or kerosene, making the billionaire’s plan a potentially life‑changing intervention.
Background: A Troubled LPG Market
For years, Nigeria’s LPG sector has been plagued by a fragmented supply chain. Importers bring in cylinders, local marketers retail them, and a handful of distributors control the bulk‑depot prices. According to the Energy Commission, annual LPG consumption in the country is about 1.2 million tonnes, yet domestic production barely covered 30 % of that in 2023. The price gap between ex‑depot and retail levels often exceeds N200 per kilogram, leaving low‑income families priced out of cleaner fuel.
Compounding the issue, a three‑day strike at the Dangote Refinery in early June halted both gasoline and LPG output, sending prices soaring in the weeks that followed. During that period, the average LPG price doubled, igniting public outcry and prompting the government to warn of a looming energy crisis.
Direct‑Sale Plan Unveiled at the Lekki Refinery
Addressing members of the Lagos Business School CGEO Africa program, Dangote explained that the refinery now churns out roughly 22,000 tonnes of LPG each day – a figure that dwarfs the nation’s total domestic output a year ago. "We are producing enough to meet a sizable share of the local market," he said, emphasizing the firm’s commitment to lower prices.
He warned that if existing distributors fail to cut their margins, the group will bypass them entirely, delivering cylinders straight from the plant to retail outlets and, eventually, to consumers’ doorsteps. The proposed model mirrors the vertical‑integration strategy the refinery has already employed for diesel and aviation fuel.
Marketers React: Monopoly Fears Surface
The announcement sparked an immediate backlash. On Monday, a coalition of LPG marketers gathered outside the refinery gates, brandishing placards that read “No Monopoly!” and “Protect Our Jobs.” Their spokesperson, Chidi Okonkwo, argued that a single supplier could dictate terms, inflate prices once competition is eliminated, and jeopardize the livelihoods of thousands of small‑scale traders who depend on the distribution network.
Industry analysts, however, note that Dangote’s pricing history suggests otherwise. Since the strike, the refinery’s ex‑depot price fell from N810 to N760 per kilogram – a reduction of N50, or roughly 6 %. If the trend continues, consumers could see savings of up to N200 per kilogram compared with the current market average.
Price Cuts and Immediate Consumer Impact
Early adopters in Lagos reported that the new cylinders, sold directly by the refinery’s logistics arm, arrived with a clear price tag of N760 per kilogram. For a typical family that uses three cylinders a month, that translates to a monthly saving of about N1,500 – money that could be redirected to food or school fees.
Meanwhile, the Nigerian Petroleum Regulatory Authority (NPRA) has pledged to monitor the rollout, ensuring that the direct‑sale scheme does not breach anti‑trust regulations. The regulator’s deputy director, Mrs. Aisha Bello, said, "We will work closely with Dangote Group to safeguard competition while encouraging price‑friendly initiatives."
Broader Implications for Nigeria’s Energy Landscape
Beyond cooking gas, Dangote’s plan includes direct distribution of petrol, diesel, and aviation fuel. If successful, the model could reshape Nigeria’s entire fuel supply chain, reducing the country’s dependence on imported refined products and curbing the chronic fuel‑shortage cycles that have plagued the nation for decades.
Economists point out that a more transparent pricing structure could improve fiscal stability. Lower fuel costs mean reduced transportation expenses for goods, potentially lowering inflationary pressures. Moreover, a shift from firewood to LPG would yield public‑health benefits, cutting indoor air‑pollution‑related illnesses by an estimated 12 % according to a 2022 World Bank study.
Critics, however, caution that any single entity’s dominance carries risks. They argue that without robust oversight, price‑setting power could revert to the top, especially if the refinery’s production capacity expands beyond current levels.
What Comes Next?
Dangote has set a tentative rollout timeline: pilot distribution will begin in Lagos and its suburbs within the next two weeks, followed by a phased expansion to other major cities such as Kano, Abuja, and Port Harcourt by the end of the quarter. The company says it will invest an additional $150 million in logistics, including a fleet of tanker trucks and a digital platform for order tracking.
Stakeholders are watching closely. If the initiative delivers on its promise of cheaper, reliable LPG, it could become a template for other African nations wrestling with similar energy‑access challenges.
Frequently Asked Questions
How will direct LPG sales affect Nigerian household budgets?
With the refinery’s ex‑depot price set at N760 per kilogram, families using three cylinders a month could save roughly N1,500 compared with the market average of N1,000‑N1,300. Those savings add up over a year, freeing up cash for food, education or healthcare expenses.
What are the current LPG prices across Nigeria?
As of early October 2025, retail LPG prices range from N1,000 to N1,300 per kilogram, depending on location and distributor markup. The refinery’s direct‑sale price of N760 represents a significant discount, though availability may initially be limited to major urban centres.
Who are the main marketers opposing the plan?
The opposition is led by the Nigerian LPG Marketers Association, which represents dozens of importers and local distributors. Their spokesperson, Chidi Okonkwo, argues that a single supplier could erode competition and threaten the livelihoods of thousands of small‑scale traders.
How much LPG does the Dangote Refinery actually produce?
The refinery’s latest operational report cites a daily LPG output of about 22,000 tonnes, enough to supply roughly 8 % of Nigeria’s total annual LPG consumption. Production has been ramping up since the plant reached full capacity in mid‑2025.
Could the direct‑sale model create a monopoly?
Regulators say they will monitor pricing and market share closely. While Dangote’s scale gives it considerable influence, competition could still arise from other domestic producers and imported LPG, especially if the government encourages new entrants.
