Nigeria’s Expanding LPG Market

On 29 March 2021, the Nigerian government announced the ‘Decade of Gas’, an initiative designed to ensure that Nigeria can take advantage of the global energy transition. National stakeholders seemingly renewed their resolve to optimize Nigeria’s gas resources throughout the new decade. This resolve was accompanied by a call to boost the widespread utilization of all forms of gas products, from compressed natural gas (CNG) to liquefied petroleum gas (LPG), in Nigeria. Nigeria’s gas sector is still largely underdeveloped with gas products struggling to gain domestic market acceptance, but LPG seems to stand out of the pack, with increasing domestic adoption.

LPG: NIGERIAN HOUSEHOLDS’ PRIZED GAS PRODUCT

LPG has a wide variety of uses, ranging from automotive fuel to chemical feedstock. Despite this, its primary use in Nigeria has been domestic. LPG currently constitutes about five per cent of Nigeria’s household energy mix, and this figure continues to increase rapidly.

Nigeria’s domestic consumption of LPG increased from 250,000 metric tonnes in 2013 to over one million metric tonnes in 2020—an increase of over 300 per cent within seven years. This rapid increase in LPG adoption is a major indicator of Nigeria’s position as one of the fastest-growing LPG markets in the world.

While the growing LPG adoption rate undoubtedly holds huge promise for Nigeria’s clean energy agenda (due to LPG’s low carbon intensity), Nigeria does not appear to be ready for large-scale LPG adoption in its domestic market. This unreadiness is due to a number of bottlenecks including a low level of regulation of the LPG retail market, shortage of LPG facilities, and an unresolved cylinder crisis in the country.