Iran War Supply Crunch Cuts Nigeria’s LPG Demand by 23%
According to the latest report by energy intelligence provider Argus, LPG markets across the region largely withstood the price volatility and global supply tightness triggered by the conflict, although the disruption exposed vulnerabilities in some emerging markets.
Nigeria, the region’s largest LPG consumer, recorded a seven month low in demand at 123,000 tonnes in June, data from the Nigerian Midstream and Downstream Petroleum Regulatory Authority showed.
The figure represented an almost 23 per cent decline from the 159,000 tonnes recorded in March.
Argus said Nigeria’s domestic LPG production also fell by more than 20 per cent during the period, following lower output from inland gas processing plants and maintenance at the Dangote refinery’s 218,000 barrels-per-day Residual Fluid Catalytic Cracker.
The supply shortfall prompted LPG operators to increase imports, which rose to a six month high of 46,000 tonnes in June, compared with 3,000 tonnes in May and no imports in April.
The market later received some relief after international LPG prices declined following the United States-Iran peace deal in June and weaker competition from Asian buyers.
The Argus butane West Africa index fell by more than 40 per cent to $513.50 per tonne on June 24, from a March peak of $860.50.
The lower international prices helped Nigeria move to a 30,000 tonne LPG surplus after four consecutive months of deficit, according to Argus.
Domestic production also rebounded in July, 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 recovery in local supply enabled Nigeria to reduce imports as hostilities between the United States and Iran resumed and international LPG prices began to rise again.
Improved supply also brought some relief to consumers, with the average retail price of LPG falling by 10 per cent month-on-month to N1,491.75 per kilogramme in July.
Demand also increased by seven per cent to 136,500 tonnes, marking the first monthly increase since March.
Elsewhere in West Africa, Ghana experienced tighter LPG supplies as seaborne imports fell by almost a third year-on-year to about 24,000 tonnes per month between April and August, according to vessel-tracking firm Kpler.
The decline in imports pushed Ghana’s LPG stocks down by more than three quarters to 5,500 tonnes in early July, equivalent to about eight days of consumption.
However, increased domestic production helped cushion the impact, with much of the additional supply coming 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 increase Ghana’s domestic LPG supply.
Despite the supply pressure, Ghana’s LPG consumption rose by almost 11 per cent year-on-year to 96,000 tonnes in the second quarter, although growth slowed significantly from the 24 per cent recorded in the first quarter.
Kenya also maintained growth in LPG demand, although at a slower pace.
Demand increased by nearly five per cent year-on year to 125,000 tonnes between April and June, compared with 18 per cent growth in the first quarter.
Seaborne LPG imports into Kenya rose by 15 per cent to 53,000 tonnes per month during the first eight months of 2026, following the opening of Tanzanian company Lake Gas’ 10,000-tonne Vipingo LPG terminal last year.
Argus said increased competition among importers helped contain 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.
The supply disruptions occurred amid continued expansion of LPG infrastructure across sub-Saharan Africa.
Tanzanian company Taifa Gas is close to completing a 30,000 tonne LPG terminal at Mombasa, Kenya, which will be capable of receiving very large gas carriers.
Lake Gas also plans to add 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 the region by 2028.
In Cameroon, the state-owned Société Camerounaise de Dépôts Pétroliers increased storage capacity at its Douala terminal by 1,000 tonnes this summer, taking total capacity to 3,500 tonnes.
Another 2,000-tonne storage sphere is under construction, while the company plans to double the terminal’s transloading capacity to 1,950 tonnes per day to ease supply bottlenecks.
The developments come as African countries introduce policies aimed at expanding LPG access and accelerating the adoption of cleaner cooking fuels.
