LPG Supply Crisis Looms

…As Dangote Refinery’s Market Dominance Sparks Alarm

BY GBOGBOWA GBOWA

Nigeria’s Liquefied Petroleum Gas (LPG) market is teetering on the edge of a supply crisis, as industry insiders raise red flags over the monopolistic grip of the Dangote Refinery.

Once hailed as a beacon of energy independence, the refinery’s aggressive pricing tactics and market consolidation have now left the country vulnerable to scarcity and volatility.

Since January 2025, the Dangote Refinery has systematically displaced traditional LPG suppliers—including Nigeria LNG (NLNG) and independent importers—by slashing prices to unsustainable levels. This strategy, while initially celebrated for lowering consumer costs, has effectively pushed competitors out of the market. Those whose business it is to know say in the past eight months, Dangote has operated as the de facto sole supplier of LPG.

In a dramatic twist, the refinery has ceased LPG production and supply without public explanation. With previous suppliers hesitant to re-enter the market for fear of future undercutting, Nigeria now faces a precarious supply gap. Importers, even if willing, would require up to 23 weeks to land new product, exacerbating the risk of price spikes and household hardship.

Energy analyst, Yemisi A. Olagunju warns that this development is a “troubling preview” of what unchecked market dominance could mean for other critical fuels like Premium Motor Spirit (PMS).

“The refinery’s price undercutting strategy underscores the systemic risks of a monopolistic structure within Nigeria’s downstream sector,” she wrote in a recent market update.

The Nigerian Liquefied and Compressed Gases Association (NLCGA), however, has defended Dangote, accusing unions like NUPENG of extortion and sabotage. They claim the refinery’s pricing has liberated Nigerians from decades of cartel-driven fuel importation and subsidy fraud.

.The crisis is unfolding amid broader tensions. A recent court ruling barred PENGASSAN from cutting gas supply to the refinery following mass layoffs and union disputes.

Meanwhile, the federal government has brokered a new two-year crude supply deal with Dangote, reinforcing its central role in Nigeria’s fuel landscape.

With LPG production stalled and alternative suppliers sidelined, Nigerians may soon face severe cooking gas shortages. The situation highlights the dangers of over-reliance on a single supplier, especially in a sector as vital as energy.

As calls grow for regulatory intervention and market diversification, the Dangote Refinery’s dominance is no longer just an economic issue but has become a national concern.