Nigeria’s LPG market is growing. The price problem remains.
Nigeria’s LPG market is growing, infrastructure is expanding, and the challenge of getting affordable cooking gas to more consumers.
For years, Nigeria has wanted more people to use LPG, and the market is building for that future. More gas is being supplied, more storage capacity is coming online, and new infrastructure is being developed to move the product more efficiently. But between a full storage tank and a household cylinder is a supply chain with its own costs. That is where the price story becomes more complicated.
The latest development in the sector is the completion of a 5,000-metric-tonne LPG and propane terminal by Asiko Energy Holdings in Ijora, Lagos.
The facility is the first phase of the company’s planned integrated gas terminal and is designed to address three areas that have long affected the LPG supply chain: storage, marine access and truck evacuation.
The terminal is connected to three jetty points at Apapa Port through a 1.7-kilometre pipeline, giving it direct access to coastal supply. It has five mounded, propane-rated tanks and can receive products at about 440 tonnes per hour and evacuate about 160 tonnes per hour, according to Asiko Energy.
Expanding the LPG supply chain
Nigeria has significant natural gas resources, but infrastructure limitations have historically made it difficult to turn those resources into reliable domestic supply.
Nigeria LNG Limited has become a major supplier to the domestic LPG market. The company says it has supplied butane to the Nigerian market since 2007 and has committed all of its butane production to domestic needs from 2022. NLNG says its domestic supply has grown to more than 500,000 metric tonnes.
After the Asiko terminal, NLNG Managing Director Adeleye Falade said the company produced about 500,000 tonnes of LPG in 2025. He said that volume represented about 40 percent of national demand, showing the size of the market still left to be supplied. NLNG plans to increase its LPG production capacity by 50 percent by the end of 2027.
That points to a market with room for more supply, more storage and more distribution infrastructure.
More infrastructure does not mean lower prices
A larger terminal can help move and store more gas. It does not, by itself, determine what a household pays when it refills a cylinder.
Falade made this distinction at the Asiko terminal. He noted that additional storage capacity would not automatically translate into lower retail LPG prices because the final price is also influenced by product supply, import costs, transportation, exchange rates and other distribution costs. That distinction matters because the cost of LPG has remained significant for consumers.
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The National Bureau of Statistics reported that the average retail price for refilling a 5kg cylinder reached ₦8,323.95 in June 2025, representing a 19.49 percent increase from ₦6,966.03 in June 2024. For a 12.5kg cylinder, the average price rose to ₦21,010.56, up 33.52 percent year-on-year.
The figures show why the LPG conversation cannot stop at production capacity.
The supply chain matters
The journey from gas producer to household involves several stages. Gas needs to be produced or imported, transported, stored and moved to filling plants before it reaches the consumer. Every additional cost along that chain can affect the final retail price.
This is where facilities such as the Asiko terminal become important. Its connection to three Apapa jetties is intended to improve access to marine supply; its storage capacity provides another point from which LPG and propane can be distributed into the domestic market. The company says the terminal is designed to strengthen the link between coastal supply and inland distribution. That infrastructure can help address one part of the problem: getting enough product into the supply chain and moving it efficiently.
The remaining challenge is ensuring that efficiency reaches the end of the chain.
The growth has to reach the household
Nigeria’s LPG market is clearly expanding. Producers are planning more output. Private companies are investing in terminals. Government-backed interventions such as the Midstream and Downstream Gas Infrastructure Fund are supporting new midstream and downstream gas infrastructure.
But the success of that expansion will ultimately be measured beyond the size of the tanks or the number of terminals completed.
It will be measured by how reliably households can access LPG, how easily businesses can secure supply and, importantly, how much consumers have to pay for it.
The country needs more gas infrastructure. It also needs a supply chain capable of moving that gas efficiently and affordably. For Nigeria’s LPG market, growth may be underway. The harder task is making sure the benefits of that growth reach the people buying the gas.
