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WEEKLY LPG INSIDER REPORT


Prices for LPG in the international market rose for the most part of the week and ended at a slight lower level in the week under review

  • International(Mont Belvieu) prices of LPG increases throughout the week but ended on a lower note compared to the price towards the end of the week.

  • Prices of LPG at the depot level rose at the initial period of the week but slightly fall at the end of the week. The price difference between the Mont Belvieu and depot prices are widened in response to the increase in prices in the international market.

  • Compared to the previous week, the difference between depot prices per kg of LPG and retail prices in Nigeria has not changed significantly.

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

     

    A frequent feature of the Nigerian LPG market has been the regional disparity in LPG prices across the country. Particularly due to its proximity to the ocean, the South-East geopolitical zone hosts the large amount of depots in the country, prices in the area are highest.

     

    • The exchange rate of the naira to the US. dollars has remained at N380 to US.$1 official pegged rate while (Figure D), disparities continue to widen in the parallel market.

    • Nigeria's foreign reserve is continuing to experience a decline as in the previous week. The continuous decline, howbeit, slightly in magnitude, has been the trend for over a month.

    • In November, the current CBN Purchasing Managers Index (PMI) for the gas sector reported a decrease in new orders for the electricity, gas, steam & air conditioning supply segment, while business activities and employment & inventory were contracted in the same month. The declining trend in business activities and employment & inventory in the corresponding value chains signals a reduction in demand.

    • The persistent rise in inflation for the past 12 months (14.89% in November, 14.23 in October, 13.7 %in September, 13.2 %in August, 12.8 %in July, 12.6 % in June from 12.4 %in May 2020) is increasingly reflected in the country's higher LPG prices. More specifically, the composite food index rose from 16.16% in September and 16.0% in August to 17.38 % in October, 15.48 % in July 2020 compared to 15.18 %in June 2020.

    • Prices of crude oil in the international market rose throughout the week under review. (Figure E).

       

       

       

       

       

       

      We expect LPG prices to continue to fluctuate as domestic prices adjust to reflect the sudden changes in international prices in the week under review

       

 

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