"Prices have shown a slight rise in the international and domestic markets for LPG in the immediately preceding week "

• International prices of LPG started with an initial rise and later remained at a constant price level for the rest of the week under review.

• Compared to the previous week, we see a drop in the price of LPG in the international market. Depot prices have remained fairly consistent in the midst of these changes.

• Prices per kg of LPG at the depots in Nigeria are still well over double the prices at the international market, similar to what we have seen in the previous weeks.

• In the midst of dwendling prices, global demand for LPG is begining to pick up pace as countries ease the lock-down occassioned by the

• Regional disparities in the retail prices of LPG within the country continue to persist.

Regional disparity in the prices of LPG across the country has been a regular feature of the Nigerian LPG market. Though the South-south geopolitical zone hosts the great majority of depots in the country due to its proximity to the ocean, prices have been highest in the region.

• The official exchange value of the naira to the US. $ remained stable at N360 to US.$1 throughout the week (Figure D). It suffices to report that the Central Bank of Nigeria (CBN) has announced a new official rate at N380 to US. $1.

• This recently announced devaluation of the naira will further ensure the convergence of prices in the market and a potential rise in LPG prices in the domestic market.

• The foreign reserve is continuing to experience a drop in just like the previous week. A drop of about US$13.7 was recorded in the week under review. This drop witnessed in the size of Nigeria's foreign reserve along with the recently announced devaluation may lead to a firmed up naira price.

• The composite Purchasing Managers’ Index (PMI) for the Electricity, gas, steam & air conditioning supply sub-sector in the month of June 2020 stood at 42.7 points, indicating contraction even though this index is an improvement from the 17.8 points recorded for the previous month, May.

• The recently announced 1.8% growth rate for Q1 2020 will boost, at least, temporarily, the confidence of investors and market players of the viability of the Nigerian market.

• Prices of crude oil in the international market in the week under review showed a showed an initial drop and a subsequent rise and then stable price for the rest of the week under review (Figure E).

 

The continuous oversupply situation in the international market for Natural gas will likely lead to a continuous drop in prices in the weeks to come.