Prices are beginning to rise in the international market and has remained stable in the domestic market for LPG in the immediately preceding week

• Prices of LPG in the international market fell for the most part of the week under review. Prices only began to rise towards the of the week.

• Week-on-week differences in the price of LPG at the depot level have not changed much in the week under review.

• The difference between prices per kg of LPG at the depots in Nigeria and prices at the international market are becoming narrower compared to several weeks ago.

• 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 exchange value of the naira to the US. $ has remained stable at the new rate of N381 to US.$1 throughout the week. (Figure D). However, the Central Bank of Nigeria (CBN) is yet to formally reflect the new rate in their official website.

  • The foreign reserve recorded a slight rise away from the continuous drop it has witnessed in the previous week. The slight rise witnessed in the size of Nigeria's foreign reserve does not necessarily reflect a firming up of the naria against the US. dollar.

  • For the gas market, the Purchasing Managers Index(PMI) of the CBN report growing Business Activities, and New Orders but declining employment and inventory for the month of July 2020 compared to June. The growing Business Activities, and New Orders come from the recently relaxed lock-down due to the COVID-19 while declining inventory and New Employment seem to reflect a strategy to avoid risks.

  • The removal of the restriction on inter-state movement due to the COVID-19 is leading to an initial rise in prices for LPG at the depot level

  • Prices of crude oil in the international market in the week under review showed an unstable trend, after an initial rise (Figure E).

   

  

  • We expect a visible growth in the price of LPG within the domestic economy as the naira weakens against the US. Dollar.

  • We also expect a more than proportionate rise in LPG prices at the retails level compared to the depot/international prices in the coming weeks.