How Profitable Is the LPG (Cooking Gas) Business in Nigeria?
The LPG (cooking gas) business in Nigeria is one of the most profitable ventures today. With the rising demand for clean cooking energy, gas retailers and plant owners are earning daily, and the numbers speak for themselves.
Let’s break it down using a simple 5-ton LPG plant example
Profit Breakdown for LPG Cooking Gas Business (2025 Update)
The LPG market in Nigeria is growing fast, and prices have changed significantly in 2025. Using the current average depot price of ₦18,500,000 per 20 tons, here’s a realistic profit breakdown for a 5-ton LPG plant.
Cost Breakdown (5 Tons of LPG)
- Current Depot Price (20 tons): ₦18,500,000
- Price per ton: ₦18,500,000 ÷ 20 = ₦925,000 per ton
Therefore,
5 tons = ₦925,000 × 5 = ₦4,625,000
> Estimated logistics/transport cost: ₦250,000 (average, depending on distance)
> Total Landing Cost: ₦4,625,000 + ₦250,000 = ₦4,875,000
Landing Cost per Kg
1 ton = 1,000 kg
So, 5 tons = 5,000 kg
> ₦4,875,000 ÷ 5,000 = ₦975 per kg (landing cost)
Sales Price and Profit Calculation
Because the LPG market is deregulated, you can set your selling price based on your area and demand.
Let’s assume a very conservative profit margin of ₦50 per kg
- Selling price = ₦975 + ₦50 = ₦1,025 per kg
- Sales revenue = ₦1,025 × 5,000 kg = ₦5,125,000
- Profit = ₦5,125,000 - ₦4,875,000 = ₦250,000
> Profit per cycle (5 tons): ₦250,000 minimum
Real Market Profit Potential (2025 Reality Check)
Most LPG retailers actually make ₦100–₦300 profit per kg, depending on:
- Their location (urban = higher sales price)
- Delivery costs
- Competition and customer base
So, let’s calculate real-world profits
| Profit Margin (₦/kg) | Total Profit (₦) |
|---|---|
| ₦50 | ₦250,000 |
| ₦100 | ₦500,000 |
| ₦200 | ₦1,000,000 |
| ₦300 | ₦1,500,000 |
This means, depending on your sales volume, buying price, and location, your 5-ton LPG plant can earn between ₦250,000 and ₦1.5 million per refill cycle, often within a few days to a week.
Why LPG Is Still One of the Most Profitable Businesses in 2025
Over 60% of Nigerian households now use gas for cooking. Now, more families and small businesses are switching to gas.
This includes the government support. For example, the National Gas Expansion Programme continues to encourage LPG adoption. So it is a deregulated market – You can set competitive but profitable prices. With quick ROI, 5-ton plant can recover setup costs in 8–14 months depending on sales volume.
Final Thoughts - Is it Worth It?
With depot prices now around ₦18.5 million per 20 tons, a 5-ton LPG plant still delivers strong profit margins.
Even at ₦50 profit per kg, you earn ₦250,000 per cycle, and up to ₦1.5 million at higher margins.
So, this makes the LPG business remains one of Nigeria’s most profitable, sustainable, and scalable ventures in 2025, going into 2026 and beyond.