Gas Cylinder Prices in Nigeria

With LPG cylinders being an essential cooking fuel for millions of households in Nigeria, the recent spike in prices has caused significant hardship.

This Post examines the current gas cylinder pricing situation, factors impacting costs, future outlook, and tips to manage expenses.

Overview of Cooking Gas Cylinder Usage in Nigeria

Liquefied Petroleum Gas (LPG) cylinders have become the clean cooking fuel of choice for homes across Nigeria. Here are some benefits driving adoption:

Convenient and easy ignition compared to firewood or charcoal
Time and cost savings as no need to procure traditional fuels regularly
Reduced health risks like respiratory illness from smoke inhalation
Lower carbon emissions and reduced deforestation

Given these advantages, Nigeria’s LPG consumption has risen rapidly over the past decade. The 12.5kg cylinder is the most common size used for domestic cooking. With foreign exchange shortages impacting LPG imports, recent cylinder price spikes have made LPG unaffordable for lower-income families.

Current Gas Cylinder Prices in Nigeria

As of October 2023, the current cooking gas cylinder prices in Nigeria are:

12.5kg cylinder – ₦28,000 to ₦33,000
3kg cylinder – ₦13,200 to ₦17,500

The steep price rise over the past 2 years has been attributed to multiple factors like rising global LPG prices, forex scarcity, high transportation costs, and devaluation of the Naira. Regional variations exist with prices in Abuja, Lagos, and Port Harcourt being slightly higher.

Factors Influencing Gas Cylinder Prices in Nigeria

The retail prices of LPG cylinders in Nigeria are dependent on several macroeconomic factors:

Global LPG prices – International price swings impact landed cost of imported cylinders.
Exchange rates – Naira devaluation against USD leads to higher import costs.
Logistics – High trucking costs due to poor road infrastructure.
Taxes – Import duties, VAT, and other levies increase prices.
LPG terminal infrastructure – Inadequate storage and bottlenecked supply chains.
Alternate demand – Usage for industries and autogas impact supply.
Subsidies – Lack of subsidies to cushion impact of global price rises.
Seasons – Prices fluctuate during high-demand seasons like festivities.

These factors combine to drive LPG price volatility, making budgeting difficult for consumers.

Impact on Consumers

The steep LPG cylinder price rise has had a significant impact on Nigerian households:

Difficulty in affording refills has forced reliance on unsafe cooking fuels like firewood, charcoal, and kerosene.
Switching to alternate fuels increases health risks from indoor pollution and accidents.
Additional time and effort are needed for procuring and preparing traditional fuels.
Rural families are disproportionately affected due to higher alternate fuel costs.
Knock-on effect on food prices as roadside food vendors hike prices to cover LPG costs.
Heightened risk of deforestation and ecological damage as demand for biomass fuels rises.

Without government intervention, advocates estimate over 60% of households could revert to using unhealthy traditional cooking fuels.

Price Outlook and Forecasts

Owing to the global energy crunch, the outlook for LPG cylinder prices in Nigeria remains bleak. Some forecasts for the coming months:

Q4 2022 – ₦12,000 to ₦14,000 for a 12.5kg cylinder
Q1 2023 – ₦13,000 to ₦15,000 for a 12.5kg cylinder
Q2 2023 – ₦14,000 to ₦16,000 for a 12.5kg cylinder
Q3 2023 – ₦20,000 to ₦25,000 for a 12.5kg cylinder
Q4 2023 – ₦28,000 to ₦33,000 for a 12.5kg cylinder
Q1 2024 – ₦35,000 to ₦40,000 for a 12.5kg cylinder
Q2 2024 – ₦40,000 to ₦45,000 for a 12.5kg cylinder
Q3 2024 – ₦45,000 to ₦50,000 for a 12.5kg cylinder
Q4 2024 – ₦50,000 to ₦55,000 for a 12.5kg cylinder

This forecast indicates a continuous upward trend in LPG cylinder prices in Nigeria, with an estimated increase of over 300% from November 2022 to the end of 2024. As mentioned previously, actual price changes will be influenced by international crude oil and LPG prices, as well as the Naira exchange rate.

The extent of the actual price hike will depend on international crude oil and LPG prices along with the Naira exchange rate.

With rising inflation also impacting household incomes, the outlook for LPG affordability in Nigeria remains bleak unless corrective policy action is taken by President Bola Hammed Tinubu’s led Government.

Government Interventions Required

To ensure LPG cylinders remain affordable for Nigerian households, the following government interventions have been proposed:

Tax waivers – Reducing VAT, import duties, and other levies to lower costs.
Investment in infrastructure – Develop adequate LPG terminal capacity and distribution networks.
Subsidies and social programs – Provide means-tested subsidies on LPG for low-income families.
Promote production – Incentivize investment in domestic LPG production using natural gas.
Price regulation – Institute price controls and maximum retail price frameworks.
Awareness programs – Educate on efficiency practices to lower LPG consumption.
Forex allocation – Prioritize forex availability for LPG importers.

A coordinated policy response is vital for making clean cooking accessible across Nigeria.

Managing Gas Cylinder Expenses

Despite price hikes, consumers can adopt certain practices to manage LPG cylinder expenses:

Use smaller burners – Use appropriate-sized burners for the dish.
Use pressure cookers – They save fuel by cooking faster.
Limit oven usage – Microwaves and induction cooktops use less energy.
Cut down flaring – Reduce unnecessary burning without cookware.
Purchase subsidized cylinders – Where government subsidies are available.
Buy during off-peak times – Prices tend to be lower during summers.
Share cylinders – Go halves on purchase and usage with neighbors.
Maintain cylinders – Ensure valves, hoses, and stoves are in good condition.
Switch fuels judiciously – Balance costs and health impact.

With some prudent habits and diligent maintenance, consumers can stretch their LPG cylinder usage further.

Alternate Cooking Fuels

As families shift away from unaffordable LPG, the demand for alternate cooking fuels is rising steeply:

Firewood

Prices are expected to rise by 30-40% as winter demand surges.
Increased deforestation and forest degradation risks.
Major source of indoor air pollution causing respiratory diseases.

Kerosene

Government has discontinued subsidy support resulting in higher prices.
Emits harmful fumes and high carbon soot.
Risk of burn injuries and fires.

Charcoal

Also faces acute shortages driving up prices by over 50%.
Leads to environmental damage and loss of green cover.
Exposure to harmful smoke poses health issues.

Biomass Pellets

Offers a cleaner and efficient alternative for cooking fuel.
Availability across Nigeria remains limited resulting in high prices.
Production needs to be rapidly scaled up.

Rising costs of traditional fuel sources along with health, environmental and safety risks make it important to increase access to clean fuels like LPG.

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Conclusion

Consumers should be educated on efficiency practices to manage consumption costs. Lack of access to clean fuels like LPG has a disproportionate impact on low-income families, women, and children. Hence appropriate measures must be instituted that align with climate, health, and development objectives.