Nigerian households are bracing for tougher times, as rising energy costs and a newly announced petrol consumption tax threaten to stretch already fragile incomes.
According to the National Bureau of Statistics (NBS), the average retail price for refilling a 12.5 kilogram cylinder of Liquefied Petroleum Gas (LPG), commonly known as cooking gas, rose by 44.51 percent year-on-year in July 2025. The price jumped from ₦14,261.57 in July 2024 to ₦20,609.48 in July 2025.
The NBS report, published on Tuesday, shows that while there was a modest month-on-month decline of 1.91 percent — from ₦21,010.56 in June 2025 to ₦20,609.48 in July 2025 — the relief is too small to offset the long-term upward trend. Analysts caution that this slight dip does not necessarily signal a sustained fall in prices.
Similarly, the price of a 5 kg cylinder also reflects a year-on-year surge of nearly 38 percent, rising from ₦5,974.55 in July 2024 to ₦8,243.79 in July 2025, even though it recorded a marginal 0.96 percent decline month-on-month.
The Federal Government has previously sought to stabilise gas prices by restricting exports. In October 2024, it ordered producers to prioritise domestic supply, with the policy taking effect in November. At the time, the Minister of State for Petroleum Resources (Gas), Ekperikpe Ekpo, said the measure was intended to curb runaway costs and ensure availability for Nigerian households. Despite this, prices have continued to climb, raising concerns about affordability and access.
While households grapple with higher cooking gas bills, the Government has unveiled another policy that could further impact consumer spending. Beginning January 2026, Nigerians will pay a 5 percent levy on petrol purchases, equivalent to ₦500 on every ₦10,000 spent.
Officials say the new tax is part of efforts to discourage fossil fuel use, cut carbon emissions, and promote investment in renewable energy. The levy will be collected at the point of sale and will not apply to kerosene, LPG, Compressed Natural Gas (CNG), or other cleaner alternatives. Revenue generated will reportedly be channeled into climate change projects and renewable energy initiatives.
However, analysts warn that the petrol tax could have serious inflationary consequences, particularly by raising transport costs and driving up the price of goods and services nationwide. Critics argue that the flat levy system disproportionately affects lower-income households, who already bear the brunt of rising energy prices.
“The combination of soaring cooking gas prices and a new fuel tax risks worsening the cost-of-living crisis,” one energy economist told reporters. “While the government’s clean energy goals are commendable, the immediate social and economic pressures could be severe.”
For many Nigerians, the challenge now lies in balancing shrinking household budgets with the rising costs of essential energy sources.
