Rising LPG Prices: Impact and Implications for Nigerian Households

The average retail price of a 5kg cylinder of Liquefied Petroleum Gas (LPG), commonly used for cooking, surged by 13.75% from N6,521.58 in April 2024 to N7,418.45 in May 2024. This significant increase is part of a broader trend, with prices escalating by 70.12% over the past year, from N4,360.69 in May 2023, as reported by the National Bureau of Statistics (NBS) in its May 2024 LPG Price Watch.

Regional Disparities in LPG Prices

The NBS report highlighted substantial regional variations in the cost of refilling a 5kg LPG cylinder. Benue recorded the highest average price at N8,012.03, followed by Enugu at N7,926.21 and Ondo at N7,857.53. In contrast, Yobe had the lowest price at N5,842.31, with Jigawa and Katsina slightly higher at N6,521.81 and N6,567.95, respectively.

A zonal analysis showed the South-East had the highest average retail price at N7,680.87, followed by the South-West at N6,593.93, while the North-East recorded the lowest at N7,071.84.

Prices for 12.5kg Cylinders: A Different Trend

While the price for a 5kg cylinder increased, the average retail price for refilling a 12.5kg cylinder of LPG slightly declined by 0.07% month-on-month, from N15,637.74 in April 2024 to N15,627.40 in May 2024. However, on a year-on-year basis, this price has surged by 63.85%, rising from N9,537.89 in May 2023.

Zamfara had the highest average retail price for a 12.5kg cylinder at N18,369.33, followed by Bayelsa at N17,772.21 and Abia at N17,538.02. The lowest prices were recorded in Bauchi at N13,076.43, with Ebonyi and Taraba at N13,788.09 and N13,860.31, respectively.

Zonal analysis indicated the South-South region had the highest average price at N16,310.02, followed by the North-West at N15,991.13, while the North-East recorded the lowest at N15,010.62.

Factors Behind the Price Increase

A review conducted by Nairametrics in 2023 identified several factors contributing to the rising LPG prices. Key among these is the low investment in natural gas exploration and reduced production of associated gas. Experts also pointed to a decline in the volume of gas supplied by the Nigeria Liquefied Natural Gas (NLNG) under the Domestic Liquefied Petroleum Gas (DLPG) scheme in recent months.

Additionally, the Federal Government’s failure to follow up on the Butanisation policy of the 1980s has been cited as a contributing factor to the current price hike.

Broader Implications for Nigerian Households

The persistent increase in cooking gas prices is exerting additional pressure on household budgets, exacerbating the inflationary woes already faced by many Nigerians. This inflationary trend could lead to higher prices for retail food businesses, further straining household finances.

Moreover, the escalating cost of LPG may drive vulnerable segments of the population to revert to using firewood or other less sustainable and more polluting energy sources for cooking. This shift could delay efforts to eradicate the use of firewood and coal for cooking in Nigeria, posing environmental and health risks.

In conclusion, while the rising LPG prices reflect broader economic challenges, addressing the underlying issues, such as investment in natural gas infrastructure and effective policy implementation, is crucial for stabilizing prices and ensuring affordable access to clean cooking energy for all Nigerians.

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