Prices on the international and domestic markets started to increase for LPG in the preceding week it.

• The price of LPG in the international market continued to rise from the beginning of the week till the end of the week. However, it slightly stalled in the middle of the week.
• Week-on-week differences in the price of LPG at the depot level slightly increased in the week under review.
• The difference between prices per kg of LPG at the depots in Nigeria and prices at the international market is becoming wider against what was recorded from the previous few weeks.
• Regional disparities in the retail prices of LPG within the country continue to persist.     The regional variation in the price of LPG across the country has been a frequent feature of the Nigerian LPG industry. Because of its proximity to the ocean, the geopolitical zone of the South-East hosts the overwhelming majority of depots in the region, with the highest prices in the area.  
  
  • Exchange rate value still persistent at N380 to US.$1 throughout the week (Figure D), though disparities continue to widen in the parallel market.
  • Compared to the previous week, the Nigerian Foreign Reserve made a U-turn from its decline and rose due to the changing pattern in the international trade.
  • In December 2020, the PMI for the non-manufacturing sector stood at 45.7 points, suggesting a contraction in the non-manufacturing while in the gas market, the Purchasing Managers Index (PMI) of the CBN reported overall growth in employment, business activities and inventory while orders remianed stationary.
  • Inflation remains high. The persistent rise in inflation in the past more than 11 months (in November 14.89, October 14.23, September 13.7%, August 13.2%, July 12.8%, June at 12.6% from the 12.4% recorded in May 2020) has implications for the price of LPG across the country. More importantly, the composite food index rose to 15.75 in November, from 15.42 in October and 15.13% in September 2020.
  • The Prices of crude oil in the international market continue to fluctuate throughout the week but ended up increasing at the end of the week (Figure E).    
  We expect a more than proportionate rise in LPG prices at the retail level due to rise in the international price of LPG as a result of the winter period and persistent nature of inflation in the country.