1. Blog
  2. Lpg insider report
  3. WEEK 106: LPG Insider Report

WEEK 106: LPG Insider Report

Prices on the international market for LPG rose continuously throughout the previous week while the domestic markets for LPG were decreasing in the immediately preceding week  

By Teslim Waheed

Share On:

WEEK 106: LPG Insider Report


Prices on the international market for LPG rose continuously throughout the previous week while the domestic markets for LPG were decreasing in the immediately preceding week
 

  • The international prices of LPG reached their apex point at the end of the previous week despite increases from the beginning of the week.

  • Depot prices were on the fallen note in the preceding week with a minimum of N477.94 per kg in the previous week.

  • The market gaps between prices at the depot and those at the international level continued to narrow as more depots gained their strength to load LPG from the depot

  • In the week under review and the previous two weeks, price variations in LPG per kg remained within a narrow range.

  • Within the Nigeria region, regional variations in LPG retail prices continue to exist.

     

     

     

     

     

    The regional variation in LPG prices across Nigeria has been a recurring feature of the Nigerian LPG industry. The South West area has the lowest rates due to its closeness to the coastal region.

     

     

     

     

    • Inflation Rate and the LPG: Inflation has consistently fallen over the last eight months. It fell from 15.99% in October to 15.40% in November 2021, (See Illustration D). Coupled with the high prices of goods and services in the month of December 2021, the expected inflation rate is 17.01%. This is due to Xmas and New Year festive that are fast approaching. In April 2021, it fell from 18.12% to 17.93%. in May 2021 The composite food index reduced to 18.34% in October from 19.57% in September 2021, 20.57 per cent in January 2021, 20.30% in August 2021, and 15.48 per cent in July 2020, compared to 15.18 per cent in June 2020. For the month of May, a 15.4 per cent inflation rate is expected. The relaxation of the Covid-19 rule may have influenced the inflation rate trend.

     

    • Exchange Rate and the LPG: In line with widening discrepancies in the parallel market, the Central Bank of Nigeria's (CBN) adjusted the exchange rate to fine-tune the forex market. (Figure E). Movement in the exchange rate along the same line was increasing and ranged from 414.26 to 414.89/US$1 in the previous week. One of the factors that influence the price of LPG on the international market is the exchange rate. Since more LPG is imported, a lower exchange rate has little impact on the selling price of LPG on the local market.

     

    • Crude oil price and the LPG: The price of LPG is positively related to the price of crude oil since it is sometimes a by-product of crude oil. The Prices of crude oil in the international market reached their highest point before the end of the week, however, they ended on a fallen note (Figure F). The cost of LPG increases as the price of crude oil falls on the international market. This suggests a low LPG market price.

     

    • Foreign Reserves: The Nigerian Gross Foreign Reserve dropped from $40.52 billion to $40.49 billion last week. Despite a rise in the reserves, the exchange rate was ranged from 411.63 to 410.64 in the previous week. This is positively correlated to the crude oil prices that experienced a sharp fall at the end of the week. A decrease in the reserve might be a result of the reduction in the prices of crude oil over the preceding week.

     

    • PMI: The CBN Purchasing Managers Index (PMI) recorded overall growth in employment, business and inventory in the month of December while ordering in the category of supply for power, gas, steam and air conditioning remained stagnant while business operation & inventory were static in the same month at 45.7 per cent.

     

     

     

     

     

     

    • Covid-19: Covid-19 causes the demand for goods and services to fall due to the full or partial lock-down effect. The implication of the Covid-19 contracts the LPG market

    • Omicron Variant: A new strain of COVID-19 recently detected in southern Africa as a “variant of concern” by the World Health Organization is also no doubt causing concern among the world leaders. The implication of this variant contracts the LPG market if not curtailed early.

     

 

 

  • Reducing the effect of the Covid-19 and the Omicron variant entails more campaigns and public awareness of the virus as people are easily carried away and relaxing. Vaccines for Covid-19 and Omicron variant should be distributed without much delay if available.

 

The prices in the weeks to come may rise due to pressure on the supply of butane coupled with the increase in the price of goods and services in the country
 
 
The Nigerian LPG market is the next success story of the Global LPG industry, if you need a partner with a global perspective and local expertise in the Nigerian and African space, kindly book a free session with our team of experts to help you http://www.kiakiagas.com/book-session or write us an email at advisory@kiakiagas.com or Whatsapp: +2348085269328

 
 

Related Posts

Social Impact

How LPG is contributing to the growth of SMEs in Africas: Your One Stop LPG Provider

A crucial component of human life is energy. Reliable access to modern, reasonably priced energy is essential for a country's social and economic development. Traditional dirty-burning fuels used for cooking, such as coal, wood, and kerosene, produce large amounts of pollutants and carbon monoxide, which are the main contributors to indoor air pollution and its negative health impacts. Continual use of unclean fuels may result in early deaths, an increase in childhood and adult illnesses, associated environmental problems, and stress on the healthcare system, according to experts. Liquefied petroleum gas (LPG) was found in the search for cooking energy that would protect our environment from pollution. LPG is a type of energy that is used in cooking. It is produced by refining raw natural gas or crude oil that comes only from fossil fuel sources. It is kept and moved in LPG cylinders at a reasonable amount of pressure as a liquid. Propane and butane make up the majority of the gases created during the LPG production process. The first online energy company in Nigeria, Kiakiagas, provides excellent, prompt, and safe delivery of liquefied petroleum gas (LPG) and related products to Nigerian households and businesses. The company has developed into an energy solutions provider, paving the way for a future in which gas will drive the switchover of the African energy sector from fossil fuels to renewable sources, bringing electricity to consumers in the last mile from urban to off-grid areas.
November 24, 2022
Social Impact

HOW YOU CAN CONSERVE YOUR COOKING GAS AND MAKE IT LAST LONGER

Liquefied Petroleum Gas (LPG) is widely used for cooking around the world, but to a lesser level in most underdeveloped countries. LPG is a nonrenewable source of energy. However, when compared to cooking with hardwood or charcoal, it is commonly known that using LPG has few recorded negative health impacts. One of the main drivers of deforestation in Sub-Saharan Africa is the demand for firewood and charcoal as a source of cooking energy. Increasing the usage of LPG is one of the options for reducing the strain on forest resources. Cooking with biomass produces both greenhouse gas emissions and indoor pollution from black carbon. Kiakiagas has endeavor to reach different classes of people and orientate them on the benefit of LPG to their health. We also give information about how LPG is a more cost-effective, faster, and environmentally friendly cooking method than conventional methods. Following the increase in gas prices, many individuals were seeking for strategies to extend the life of their cooking gas. It's possible and easy to extend the life of your gas. Utilizing these suggestions will help you save a lot of money. Here, we come with a list on how you can conserve your cooking gas and make it last longer:
November 17, 2022
Social Impact

EFFECTIVE TIPS ON HOW TO SAVE YOUR COOKING GAS

It is well known that the cost of food has climbed significantly in recent months along with the price of cooking gas, making life difficult for a large number of people. For the typical Nigerian household, cooking gas has turned into a luxury good. Bravo if you still have the means to fill yours to the brim! You don't come across people who can easily and comfortably fill up their gas cylinders every day. Every residence is frantically looking for ways to adapt to this change and extend the gas supply. On a more positive side, we have developed useful advice that will lessen how frequently you visit the petrol station. We have heard the word "savings" so frequently that we are accustomed to it. Many things can be saved, but we have no idea how to do it with LPG. Everyone encounters this question on a daily basis. Is there a way to conserve LPG for cooking? There is, and it's not particularly complicated. Your cooking style only needs a few little tweaks here and there to work. To learn some crucial advice on how to conserve household LPG, scroll down.
October 26, 2022