BY SAM OTUONYE
President of the Dangote Group, Alhaji Aliko Dangote, has announced plans to reduce the price of Liquefied Petroleum Gas, also known as cooking gas.
He also promised to start direct sales of the product to consumers should the existing distributors fail to allow the price crash in cooking gas.
However, operators and stakeholders have raised concerns, believing that the plan was towards a possible monopoly of the LPG sector.
Speaking during a recent tour of his refinery by some local and foreign guests, Dangote stressed that the current price of cooking gas was expensive and not affordable for the common people who depend on firewood for cooking.
He disclosed that his refinery now produces 22,000 tonnes of LPG daily and it is ramping up production for distribution into the Nigerian market, especially as Nigerians move towards the use of gas for cooking.
Dangote said, “The one that we didn’t write, which you must have seen, is LPG. Currently, we do LPG of about 2,000 tonnes per day. You know Nigeria is gradually moving to the usage of LPG. But I believe it is expensive, but right now we’re trying to bring down the price and make it cheaper.”
He warned that “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.”
It would be recalled that Dangote plans to start the direct distribution of petrol, diesel, and aviation fuel to marketers nationwide in August, with 4,000 CNG-powered buses procured for the exercise.
Currently, the price of cooking hovers around N1,000 and N1,300 per kilogramme. Dangote said this would be brought down to ensure affordability.
It appears operators in the LPG market are not pleased with Dangote’s plan to disrupt the sector.
According to a report, the former Chairman of the LPG and Natural Gas Downstream Group of the Lagos Chamber of Commerce and Industry, Godwin Okoduwa, described the plan as monopolistic.
Okoduwa expressed concern that the billionaire businessman should recognise the fact that some investors grew the market from 70,000 metric tonnes in 2007 to over 1 million metric tonnes in 2022, saying collaboration is the way to go.
“I think it’s monopolistic. I think a market should be protected to encourage growth. The LPG industry in Nigeria grew from 70,000 metric tonnes in 2007 to over 1.3 million tonnes in 2022. That was done by collaboration — collaboration with the Federal Government, the NLNG, and offtakers. Everything was done in collaboration. It grew from 70,000 to 250 to 800, and now over a million,” Okoduwa said.
He stressed that growth cannot be achieved through a monopoly but through collaboration. “Today, we are just under 5kg or 6kg per capita consumption in terms of LPG. Other countries are doing much more. South Africa is doing double digits, Morocco and Tunisia are doing double digits. We can do much more.
Similarly, the Executive Secretary/Chief Executive Officer, Nigerian Association of Liquefied Petroleum Gas Marketers, Bassey Essien, doubted the possibility of Dangote selling gas directly to consumers or to crash the price.