Cooking Gas Prices May Surge as NLNG Supply Drops by 80%, Details Emerge

• Price of cooking gas may soon surge, as the NLNG is not getting enough gas supply
• The NLNG MD spoke about the reasons for the drop in supply and what the government must do
• Nigeria’s gas revenues could take a hit as NLNG is a major contributor to the national treasury

Legit.ng journalist Ruth Okwumbu-Imafidon has over a decade of experience in business reporting across digital and mainstream media.

Nigerians may face a further increase in the price of cooking gas, as gas supply to the Nigeria Liquefied Natural Gas (NLNG) has plunged by almost 80%.

Insider information reveals that the NLNG Limited plant only gets about 20% of its plant needs currently, and this may soon translate into reduced product availability in the market, causing a hike in price.

NLNG is a major supplier of Liquefied Petroleum Gas (LPG) in Nigeria, and as the company continues to deal with an operational crisis, cooking gas could become scarce and expensive.

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Recall that the price of cooking gas increased by 44% between December 2023 and December 2024.

Why gas supply dwindled

The company is experiencing a prolonged outage in its Bonny Island facility, and accompanied with other incidences of pipeline vandalism and repeated attacks on the facilities supplying it gas, gas supply has suffered.

Militant groups and criminal syndicates have often been blamed for these attacks, and as the gas supplies dwindle, NLNG has had to reduce its production capacity.

Cooking gas prices set to surge

Data suggests the declined output from NLNG could directly affect gas prices, not only in Nigeria, but in Asia and Europe where they also depend on the Nigerian company for their gas imports.

Bloomberg data shows that close to half of Nigeria’s gas exports in 2024 went to Asia, while about one-third went to Europe, leaving other continents to share the remaining.

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Speaking at a panel session during the recent Nigeria International Energy Summit held in Abuja, Mr. Philip Mshelbila, the Managing director of NLNG Limited, pointed to the illegal pipeline connections as a major reason for the shortage in gas supplies.

Mshelbila noted that the company may no longer be able to meet global demand for LNG and pleaded for the government to pay equal attention to the security of gas facilities as is being done with crude oil facilities, stressing that it is a matter of national security.

Nigeria’s revenue may take a hit

Nigeria’s gas revenues could take a hit as NLNG is a major contributor to the national treasury, remitting about $21.56 billion in dividends into the national treasury in the last 25 years.

The company also declared up to N346 billion dividends in 2024, and expert projections expect the figure to double in 2025. The current issues might make it impossible.

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Already, data from Bloomberg reveals a 40% month-on-month decline in Nigeria’s gas exports in February 2025.

If NLNG is unable to meet its export commitments, gas revenues could certainly drop affecting its contribution to the foreign exchange reserves.

FG starts construction of mini-LNG plants

In related news, the federal government has commenced the construction of five mini-LNG plants in Kogi state.

The project was spearheaded by the Nigerian National Petroleum Commission (NNPC), and done in partnership with private sector players.

The goal is to increase gas production in the country, create opportunities for the youth, and increase exports.

Source: Legit.ng