Plans by Africa’s richest man, Aliko Dangote, to crash the price of cooking gas and sell directly to consumers are facing stiff resistance from industry marketers.
Dangote recently revealed that his refinery, which produces up to 22,000 tonnes of Liquefied Petroleum Gas (LPG) daily, aims to flood the market and make cooking gas more affordable for ordinary Nigerians.
With current LPG prices hovering between N1,000 and N1,300 per kilogram, Dangote described the rates as “too expensive” and threatened to bypass middlemen entirely.
“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,” he stated during a tour of the Lekki refinery with participants from Lagos Business School.
However, Dangote’s proposal has sparked backlash from key players in the sector, who accuse the business mogul of attempting to dominate the market and edge out existing investors.
“This is monopolistic. The market should be protected to encourage inclusive growth,” said Godwin Okoduwa, former Chairman of the LPG and Natural Gas Downstream Group of the Lagos Chamber of Commerce and Industry.
Okoduwa argued that the LPG market’s expansion from 70,000 metric tonnes in 2007 to over 1.3 million tonnes in 2022 was achieved through years of public-private collaboration.
“He’s coming in now because the market is viable. But he shouldn’t use a zero-sum approach to squeeze out those who built the sector,”
Okoduwa warned, urging Dangote to invest in underserved regions like the Northeast instead of trying to dominate the mainstream market.
Similarly, Bassey Essien, Executive Secretary of the Nigerian Association of Liquefied Petroleum Gas Marketers, questioned the realism of Dangote’s direct-to-consumer promise.
“It’s not practical. Look at petrol. Has his refinery been able to sell petrol directly to us at cheaper prices?” Essien challenged.
While Dangote’s massive refinery is set to begin the direct distribution of petrol, diesel, and aviation fuel from August, backed by a fleet of 4,000 CNG-powered buses, LPG marketers are sounding the alarm over what they see as potential market distortion and job losses.
As Nigeria pushes for cleaner, gas-based energy for homes, the battle lines are now drawn between calls for market liberalization and fears of Dangote’s emerging dominance.
