NLNG: How Cooking Gas Offtakers Profiteered, Earned N1,600/kg Markup

Peter Uzoho

Major cooking gas offtakers made an excess N1,600 markup on every kilogramme of Liquefied Petroleum Gas (LPG) bought from Nigeria LNG Limited (NLNG), buying at N800 per kg and selling to Nigerians at N2,400 per kg during the scarcity that occurred in recent months, NLNG Limited has revealed.

It said that some of the offtakers were hoarding product at terminals and creating artificial scarcity, a practice that pushed prices far above regulatory benchmarks and inflicted hardship on households across the country.  

Managing Director and Chief Executive Officer, Mr. Adeleye Falade, disclosed this at the NLNG Facts & Figures Presentation in Lagos.  

“What we found out is that a number of people who take products, they will put it in their terminal, and they are part of those that have created the artificial scarcity that has led to the price increase. When the product was being sold at N2,400 per kg in the market, guess how much they were lifting it from us? It was between N800 and N900 per kg,”  Falade stated.

The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) had recommended that after transportation costs, retail prices should not exceed N1,000 to N1,200 per kg.  

“So there’s also some distortion that happened on the sales side, which I know the regulators are working on right now to get control of it,” Falade added.  

NLNG supplies LPG to the Nigerian market through its vessel, Alfred Temile. More than 15 terminal owners offtake the product as middlemen before selling in bulk to gas plant operators and independent petroleum marketers.  

The hoarding at terminal level, according to NLNG’s assessment by one of the big four consulting firms, meant product was not getting to retailers fast enough, tightening supply and inflating prices.  

In response, NLNG said it has changed its allocation strategy. “So preference for us is not for those kinds of people, but those that can supply directly to the retailers,” Falade said. The new ranked order prioritises offtakers with storage capacity and a proven direct-to-retail network.  

Despite the scarcity at retail level, Falade said NLNG did not have a problem around infrastructure or capability to move its product to the market. 

“That’s not a limitation for us… We sell all of our products. We actually have more demand than we’re able to sell. Our challenge was not that people were not able to take the product. Every cooking gas that we made, we had buyers,” he said.  

He acknowledged industry-wide infrastructure deficits but said they have not reached the point of stranding NLNG’s output. “There is an infrastructure deficit, but it hasn’t played itself to the point where we become stranded with the product that we have made. No, we haven’t seen it to that extent.”  

Annual LPG consumption in Nigeria has grown to 1.8 million tons in 2026 from 1.5 million tons in 2023, underscoring rising dependence on cooking gas as households shift away from firewood and kerosene.  

To ease pressure on prices, NLNG said the completion of Train 7 will be the immediate game-changer.  The $5 billion project is progressing at Bonny Island in Rivers State with about 16,000 people working daily.  

The completion of the Train 7 is going to increase the company’s LNG capacity by 35 per centIt, taking it from 22 MTPA to 30 MTPA. Aside from LNG, the project will also increase NLNG’s LPG production by 50 per cent.

Last year NLNG supplied 500,000 tons of LPG to the domestic market. With Train 7 on stream, an additional 250,000 tons will be added annually, taking the total annual supply to 750,000 tons,” the CEO said.

The extra volume is expected to improve availability and moderate the price volatility that has plagued the market in recent months.  

Falade said NMDPRA is already working to rein in the LPG market distortion with introduction of NLNG’s ranked offtaker system that is also designed to cut out middlemen who warehouse product instead of distributing it.  

Beyond LPG, NLNG said it is fast-tracking a 1.1 MTPA domestic LNG supply project targeted at industries and transport.  

The company had in June 2021 announced its plan to begin supplying LNG to the domestic market with an initial 1.1 million metric tons from July 2022. The company went ahead to sign an offtake agreement with three companies including  However, that project has been stalled.

Falade said the project remained on course.  “We do have a project already working around the domestic LNG supply… It hasn’t changed from the 1.1 MTPA that was declared at that point in time. We are behind on schedule, but we’re still working on it,” Falade said.