Rising Global LPG Prices and Middle East Crisis Threaten Nigeria's Cooking Gas Market
Industry stakeholders have issued a stark warning that escalating global liquefied petroleum gas (LPG) prices and ongoing supply disruptions linked to the Middle East crisis are severely pressuring clean cooking expansion efforts across Africa. Nigeria, as a major market, is facing growing affordability challenges that could derail its progress in this sector.
Affordability Barriers and Market Projections
Speaking at the annual conference of the African Refiners and Distributors Association (ARDA) Week in Cape Town, South Africa, Emmanuel Omuojine, Managing Director of Rainoil Gas Limited, highlighted that Nigeria's LPG market may fail to meet expansion projections. He cited prevailing economic realities and a 60 per cent rise in prices as key factors blocking access for vulnerable households.
Omuojine noted that Nigeria currently consumes about 1.6 million metric tonnes of LPG yearly, which is less than one per cent of its potential, despite its large population and abundant natural gas reserves. While per capita consumption has increased from 2.5 kilogrammes a decade ago to approximately 6.5 kilogrammes, it remains far below the global average of around 43 kilogrammes.
Amid a push by the U.S. Department of Energy to reframe clean cooking as an energy infrastructure issue in Africa, Omuojine emphasized that Nigeria should target at least three million metric tonnes of consumption in the coming years. However, he warned that affordability remains the central barrier, especially with global LPG prices surging sharply in recent weeks.
He explained that households are increasingly unable to afford full cylinder refills, forcing many to purchase smaller quantities or maintain spending levels despite higher prices. This effectively reduces consumption and slows market growth, undermining expansion efforts.
Policy Frameworks and Implementation Challenges
Omuojine pointed out that Nigeria has multiple policy frameworks in place, including the National Gas Expansion Programme, the Decade of Gas initiative, and the Gas Flare Commercialisation Programme. These are supported by infrastructure financing mechanisms such as the Midstream and Downstream Gas Infrastructure Fund. However, he stressed that implementation remains the weakest link, hindering progress.
Global Perspectives on Clean Cooking
Shiyana Gunasekara, Secretary's Lead for Global Clean Cooking Access at the U.S. Department of Energy (DOE), called for a shift in how clean cooking is framed globally. She argued that it should be treated as an energy infrastructure and market development issue, rather than purely a public health or environmental challenge.
Gunasekara emphasized that affordability, supply chains, and infrastructure are central to expanding LPG access. She noted that the U.S., as the world's largest LPG exporter, has a strategic interest in developing new markets, particularly in Africa. She outlined a three-part approach involving bilateral engagement with African governments, multilateral advocacy through global platforms like the G7 and G20, and project-level financing support through U.S. institutions such as the Development Finance Corporation and Export-Import Bank.
Supply Disruptions and Pricing Shocks
David Appleton, Senior Vice President at Argus Media, highlighted severe global supply disruptions, noting that nearly 30 per cent of seaborne LPG exports from the Middle East have been disrupted for weeks. This has pushed benchmark prices from around $600 per tonne to above $1,000 per tonne, exacerbating affordability issues.
Fernando Covas, Director and Lead for Africa, Latin America, and Europe at S&P, added that global LPG shipments have fallen by about 1.6 million tonnes compared to previous years. Transit constraints in key routes, such as the Strait of Hormuz, are tightening supply further. He explained that while Africa imports relatively small volumes directly from the Middle East, it remains highly exposed to global pricing shocks. "The impact on Africa is primarily through pricing, not physical shortages," he stated.
Affordability and Distribution Models
Philippe Hoeblich, Chief Executive of PayGas, warned that affordability constraints across Africa reflect what he described as a "poverty wall", where households can only purchase energy in very small daily amounts. Field studies in countries like the Democratic Republic of Congo, Cameroon, and Gabon show that energy poverty is worsening, with households increasingly dependent on charcoal, wood, and kerosene due to limited purchasing power.
Hoeblich noted that the dilemma for most households is whether to insist on full LPG cylinder purchases or allow flexible, smaller refills aligned with daily incomes, often around $4. He stressed that affordability must be central to policy design, as it directly determines adoption levels.
He identified two main LPG distribution models:
- Cylinder Recirculation System: Widely considered safe and effective, but highly capital-intensive, requiring multiple cylinders per household and significant infrastructure investment. Expansion often depends on subsidies, which can strain public finances.
- Flexible Refilling Model: Allows consumers to purchase LPG in smaller quantities, making it more accessible for low-income households but potentially less efficient in terms of logistics and safety.
Overall, the combination of rising global LPG prices, Middle East supply disruptions, and deep-seated affordability issues poses a significant threat to Nigeria's cooking gas market and broader clean cooking goals in Africa.
