Iran War Supply Shock Pushes Nigeria’s Cooking Gas Demand Down 23%

• Nigeria’s cooking gas (LPG) demand fell by nearly 23 per cent to a seven-month low in June as import constraints and declining domestic production disrupted supplies amid the Iran conflict, according to Argus.

Nigeria’s cooking gas market suffered the sharpest disruption among emerging Liquefied Petroleum Gas (LPG) markets in sub-Saharan Africa as the Iran war triggered global supply constraints and price volatility, a new report by energy intelligence provider Argus has revealed.

According to the report, Nigeria’s LPG demand dropped by almost 23 per cent between March and June, falling to a seven-month low of 123,000 tonnes in June, based on data from the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).

The decline was linked to tighter import supplies and a more than 20 per cent reduction in domestic LPG production. Argus attributed the fall in local output to lower production from inland gas processing plants and maintenance work at the Dangote refinery’s 218,000 barrels-per-day residual fluid catalytic cracker.

With domestic supplies constrained, Nigerian LPG operators increased imports significantly. Imports rose to 46,000 tonnes in June, up from 3,000 tonnes in May, while no imports were recorded in April.

The market began to ease after international LPG prices declined following a US-Iran peace agreement in June, alongside weaker competition from Asian buyers.

The Argus butane West Africa index subsequently fell by more than 40 per cent, from a March peak of $860.50 per tonne to $513.50 per tonne on June 24.

The lower international prices helped Nigeria move from four consecutive months of LPG supply deficits to a 30,000-tonne surplus.

Domestic production also recovered in July, further easing pressure on the market. Supplies from the Dangote refinery increased by 71 per cent to 25,800 tonnes, while supplies from gas processing plants rose by 88 per cent to 47,000 tonnes.

The improvement in local supply enabled Nigeria to reduce its reliance on imports even as hostilities between the United States and Iran resumed and international LPG prices began to climb again.

Consumers also experienced some relief. Nigeria’s average LPG retail price declined by 10 per cent month-on-month to N1,491.75 per kilogramme in July, while demand increased by seven per cent to 136,500 tonnes—the first monthly increase since March.

Supply Pressures Spread Across Africa

Nigeria was not the only sub-Saharan African market affected by tighter LPG supplies.

In Ghana, seaborne LPG imports fell by almost one-third year-on-year to approximately 24,000 tonnes per month between April and August, according to vessel-tracking company Kpler.

The decline caused Ghana’s LPG stocks to fall by more than three-quarters to about 5,500 tonnes in early July, equivalent to roughly eight days of consumption.

However, increased domestic production helped cushion the impact. Much of the additional supply came from the new 40,000-barrels-per-day Sentuo refinery, which Argus said was operating at full capacity.

A planned restart of the residual fluid catalytic cracker at the 45,000-barrels-per-day Tema refinery is also expected to further strengthen Ghana’s domestic LPG supply.

Despite the supply constraints, Ghana’s LPG consumption increased by almost 11 per cent year-on-year to 96,000 tonnes in the second quarter, although growth slowed considerably from the 24 per cent recorded in the first quarter.

Kenya also recorded growth in LPG demand, with consumption rising by nearly five per cent year-on-year to 125,000 tonnes between April and June. This was slower than the 18 per cent growth recorded during the first quarter.

Kenya’s seaborne LPG imports increased by 15 per cent to approximately 53,000 tonnes per month during the first eight months of 2026, following the opening of Tanzania-based Lake Gas’ 10,000-tonne Vipingo LPG terminal.

Greater competition among importers helped moderate price increases, with the retail price of a 13kg LPG cylinder rising by just over 11 per cent to 3,471 Kenyan shillings between March and June.

Africa Expands LPG Infrastructure

Argus noted that the supply disruption occurred as countries across sub-Saharan Africa continue to expand LPG storage, import and distribution infrastructure.

Tanzanian company Taifa Gas is nearing completion of a 30,000-tonne LPG terminal in Mombasa, Kenya, designed to receive very large gas carriers.

Lake Gas also plans to add another 15,000 tonnes of storage capacity at its Vipingo terminal by September 2027.

According to Argus LPG World, 10 projects are expected to add more than 180,000 tonnes of LPG storage capacity across sub-Saharan Africa by 2028.

In Cameroon, the state-owned Société Camerounaise de Dépôts Pétroliers increased storage capacity at its Douala terminal by 1,000 tonnes, bringing total capacity to 3,500 tonnes. An additional 2,000-tonne storage sphere is also under construction.

The company plans to double the terminal’s transloading capacity to 1,950 tonnes per day in an effort to ease supply bottlenecks.

Meanwhile, governments across the region are introducing policies aimed at expanding LPG access and encouraging cleaner cooking.

Nigeria launched its National Grassroots LPG Penetration Programme in July, adopting a cylinder recirculation model under which retailers are responsible for owning, tracking and refilling cylinders.

The initiative is aimed at reducing the cost of cylinder ownership and maintenance for households, with the government targeting five million homes and annual LPG consumption of about five million tonnes by 2030.

About 54,000 cylinders have been distributed since the programme began.

Ghana is also promoting the cylinder recirculation model and aims to increase LPG access to 50 per cent of its population by 2030.

Argus further reported that LPG adoption is expanding beyond household cooking into transportation. Nigeria has exempted autogas vehicles from value-added tax, while Kenya’s Equity Bank has partnered with distributor Proto Energy to finance vehicle conversions.

The recent disruption has highlighted the exposure of Africa’s developing LPG markets to international supply shocks. At the same time, expanding domestic production, storage facilities, import terminals and distribution networks could strengthen the region’s ability to meet growing demand for LPG and cleaner cooking fuels.