Damilola Owolabi-Osinusi is the Managing Director of Selai Gas. In this interview with KINGSLEY JEREMIAH, she speaks about the challenges of deepening domestic gas use in Nigeria, the role of funding and local production, and how her company is leveraging the government’s ‘Decade of Gas’ policy to drive access to clean cooking fuels. Owolabi-Osinusi also assesses the impact of Dangote Refinery, barriers to affordability, and what must change to make gas truly mainstream for households across Nigeria.

Funding has remained one of the biggest challenges for gas expansion in Nigeria and other African countries. How can this be solved?
Funding is indeed a huge challenge, both for us and for most operators in this space. We are currently in the process of accessing several funding sources. We have been in talks with the Nigerian Content Development Monitoring Board (NCDMB), NEXIM Bank and the Midstream and Downstream Gas Infrastructure Fund (MDGIF). These funds are crucial because the gas business is highly capital-intensive. From setting up plants to procuring cylinders and ensuring last-mile delivery, the costs are significant.

The MDGIF is particularly promising. It’s a deliberate effort by the government to fund gas infrastructure from processing to retail distribution and we are in active discussions to access that. I believe these funds, if efficiently disbursed, can drive real change and help scale businesses like ours beyond Lagos to other underserved regions.

Beyond your company, do you think Nigeria is doing enough to fund domestic gas utilisation?
Not yet, but progress has been made. Based on the latest statistics, LPG penetration in Nigerian homes has grown by roughly 20 per cent in recent years, a small but important step forward.

However, many potential investors and entrepreneurs are still discouraged by the cost of finance. Commercial banks, for instance, are not playing their part. With lending rates around 30–35 per cent, it’s almost impossible to grow or scale sustainably.

For the gas sector to thrive, we need access to patient capital, long-term, single-digit loans that match the lifecycle of infrastructure investments. The institutional funds, like those of NCDMB and MDGIF, are welcome, but some of their requirements don’t always fit the realities of smaller or women-led enterprises.

For instance, the NCDMB’s Women in Energy Fund requires either an International Oil Company (IOC) contract or a bank guarantee. A retail-focused business like ours doesn’t need IOC contracts, so we rely on commercial bank guarantees and that process can be lengthy and complex.

So, yes, there are funds, but accessibility remains a big issue. Many of these funds are not fit-for-purpose for the kind of local, retail-level businesses driving domestic utilisation.

Why did you diversify into gas retailing? 
We came into the gas space in 2020, the year Nigeria declared its Decade of Gas. Primarily, we are a gas trading and retail company based in Lagos.

We saw an opportunity in the government’s renewed focus on the gas sector and decided to enter the market. The most accessible entry point at the time was Liquefied Petroleum Gas LPG), and we identified Lagos as a niche community. Every part of Lagos is a densely populated area, yet there were very few LPG plants around. Access to affordable and clean cooking fuel was poor, so we set out to fill that gap.

We commissioned our plant in 2022, with representatives from key regulators such as the Nigerian Content Development and Monitoring Board (NCDMB), Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), and officials of the Lagos State Government in attendance. Three years after commissioning, our business has grown exponentially, and more households within our host community have transitioned to cleaner energy, which is the very foundation of our business philosophy. We are impact-driven and people-focused.

We’re now focused on scaling and expanding. Our strategy is simple; we target densely populated communities, both urban and semi-urban, where LPG adoption remains low. We are planning to expand to Lagos, Ogun and Oyo States, and ultimately, the Middle Belt and Northern Nigeria.

That northern expansion is personal to me because I’m from the Middle Belt, and I want to see cleaner energy accessible in every part of the country. The goal is to ensure that households, not just in cities but also in smaller communities, can easily access safe and affordable cooking gas.

The LPG market has changed significantly. What’s your take on sourcing gas now compared to a few years ago?
The entry of Dangote Refinery has been an absolute game-changer. Before Dangote came on stream, prices were volatile. The terminals and depots, especially around Apapa, were either imported or sourced locally, but there was little price coordination. You bought at whatever price was offered, and if you didn’t like it, you simply had no other option.

Now, with Dangote in the market, we’ve seen price stability and healthy competition. As a plant owner, my major daily concern is the landing cost, the price at which I can buy and remain competitive. Since Dangote began supplying LPG, the market has stabilised, and pricing has become more predictable.

For context, between late 2023 and early 2024, a 12.5kg cylinder of gas cost between N18,000 and N20,000. Today, that same cylinder costs between N12,500 and N15,000. This price correction is directly linked to better supply balance and competition. It’s a positive development for both businesses and consumers.

Yet, many Nigerians are still reverting to charcoal and firewood. How can domestic gas use be truly driven?
Two things stand out: the affordability of cylinders and the cost of gas itself. Cylinder acquisition is the single biggest barrier to transition. You cannot use LPG without a cylinder, yet a standard 12.5kg steel cylinder now sells for about N48,000. That’s beyond the reach of millions of low-income households.

At Selai, we’re licensed to produce our own cylinders, and we’ve launched an in-house manufacturing arrangement to help reduce cost. But the reality is that exchange rate volatility and the cost of raw materials still make cylinders expensive, even for local producers.

I often hear discussions about introducing composite cylinders. My honest view is that Nigeria is not ready for that yet. Many people cannot even afford the regular steel cylinders; composite cylinders are far more expensive.

So, the government should focus on making cylinders cheaper by supporting local manufacturers through tax waivers, stable power supply, and targeted subsidies.

On the product side, yes, LPG prices have fallen slightly, but N12,500 to N15,000 per 12.5kg is still high for poor households. When they compare this with firewood or charcoal, gas loses out. Their priority is simply to cook and eat, not the long-term health implications of smoke inhalation.

If we have more local processing and supply, and less export of domestic LPG, prices will fall further. It’s heartbreaking to hear that some locally processed LPG is exported when our domestic market is still under-supplied. Once supply rises and competition deepens, prices will naturally come down.

Would you advise the government to introduce some form of subsidy, either for cylinders or consumption?
If I were to recommend, I’d say both, but the realistic and most impactful option is the cylinder subsidy.

The government could partner with licensed producers like us to reduce our production costs through subsidies, tax rebates, or access to cheaper power. The aim should be to make cylinders affordable for the average Nigerian household.

Once a household owns a cylinder, it becomes easier to sustain gas use. But without that first step — without the equipment, there can be no transition to clean cooking.

Aside from funding and affordability, what other challenges persist within the gas retail sector?
Supply remains the biggest challenge. We simply don’t have enough LPG circulating in the domestic market.
When a plant runs out of stock, households that have already switched to gas are forced to revert to firewood or charcoal. That’s a setback for clean energy adoption. We need more local processing and deliberate effort from upstream and midstream operators to allocate a larger share of LPG for domestic use.

The second major challenge is funding. Without access to low-interest capital, plant owners cannot build storage facilities, buy cylinders, or expand distribution. With the right funding, businesses like ours can build more outlets across Nigeria, closing the accessibility gap.

What about logistics, are there still issues with LPG transportation and trucking?
Yes, logistics remain a bottleneck, although it’s improving. There’s still a shortage of trucks designed specifically for LPG transportation, and that limits distribution efficiency.

But again, this links back to funding. With better financing, more investors can acquire trucks and build regional depots. That way, a retailer in Niger State wouldn’t need to drive all the way to Lagos to load gas.

Infrastructure decentralisation is key. More loading terminals in the North and Middle Belt would drastically cut costs and improve supply.I also believe we need to invest more in pipeline infrastructure. The Ajaokuta–Kaduna–Kano (AKK) pipeline is a great initiative, but I hope it includes provisions for LPG transportation, not just CNG and autogas. If LPG is integrated into that system, it could revolutionise supply across northern Nigeria.

How would you assess the Decade of Gas policy so far?
I’d rate it positively. Selai Gas itself is a product of that policy pronouncement. The Decade of Gas, announced in 2020, inspired us to enter the sector and shaped our business model.

Since then, we’ve seen important policy developments like the Petroleum Industry Act (PIA) and now the MDGIF. These stem from that initial declaration. The policy has laid a strong foundation for private sector participation.

Of course, there’s still room for improvement, particularly in implementation and access to finance. But overall, the Decade of Gas has been instrumental in energising the market and drawing attention to the economic and environmental potential of gas.

Finally, what would you like to see happen in the sector over the next few years?
First, more supply; more LPG from local producers is released into the domestic market rather than exported. Second, better funding access, simpler, less bureaucratic financing mechanisms for genuine operators, especially women-led businesses.

And third, affordability, government and industry collaboration to make cylinders and refills cheaper. If we can achieve those three, gas will no longer be a luxury; it will be a mainstream, affordable household energy source.

At Selai, our vision is to keep expanding into communities where clean energy is still a privilege, not a norm. With the right support, we can change that reality, one household at a time.