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WEEKLY LPG INSIDER REPORT


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

  • International(Mont Belvieu) prices of LPG showed an upward trend, throughout the preceding week

  • Prices of LPG at the depot level showed a slight increase compared to the previous week: the price difference between the Mont Belvieu and depot prices are slightly narrower compared to the previous week under review.

  • The difference between prices per kg of LPG at the depots and retail prices in Nigeria has not changed much compared to the previous week. Unlike the depot prices, retail prices remain constant throughout the week.

  • 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 higher in the region.

     

     

    • The official exchange rate of the naira to the US. $ has remained at the pegged price of N380 to US.$1 throughout the week (Figure D).

    • Nigeria's foreign reserve is continuing to experience a rise as in the previous week. The continuous rise has been the trend since the devaluation and pegging of the naira at N380 to US$1.

    • For the gas market, the Purchasing Managers Index (PMI) of the CBN reports that only New Orders grew in October for the Electricity, gas, steam & air conditioning supply Index category while Business Activities and employment & inventory contracted in the same month. The declining trend in Business Activities and employment & inventory signal contraction in demand in the respective value chains.

    • The persistent rise in inflation in the past more than 11 months is already reflecting in the price of gas for the last mile user. The persistent rise in inflation in the past (in 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 of 16.16% in September still persist in October 2020.

    • Prices of crude oil in the international market in the week under review showed a rising trend, up to the middle of the week. The price later fall continuosly towards the end of the week (Figure E).

       

       

       

      We expect LPG prices to continue to rise in the coming days as inflation continues to rise owning to the fallout of the ENDSARS protests and distruption in economic activities.

Kindly book for a free session with our team of experts to help you at http://www.kiakiagas.com/book-session or write us an email at advisory@kiakiagas.com or Whatsapp: +2348085269328

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