Prices were relatively stable in the domestic and international markets for LPG in the immediately preceding week.

 

·         The price of LPG in the international market did not experience a major change, and it seems to be rising.

·         The drop in prices at the international market seems to have stopped for now with only very minor volatility.  However, prices at the depots have, as usual,  remained generally stable, as with the previous week.  Both seem to be on the rise.

·         The absolute values of the LPG depot prices increased this week due to the devaluation of the naira.

·         Price disparity for 1 kg of LPG between what obtains at the international market level and the depots in Nigeria narrows as prices in the international market.

Regional disparities within the country continue to widen.

 

 

Regional disparity in the prices of LPG across the country has been a regular feature of the Nigerian LPG market.  This gap has widened this week.. 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.

 

• International prices of crude oil continue a downward trend in the week under review.
• The foreign reserves of Nigeria had moved only slightly from US.$35,747,350,970 at the start of the week to US. $35,590,254,308 at the close of the week.  The drop is 0.44% the same as the drop recorded last week.
• The consistent drop in the size of the country's foreign reserve is and the current official devaluation of the naira is leading to an initial rise in the landing cost of  LPG to Nigeria and subsequent stabilization of prices.
• A further drop in the country's reserve is expected in the coming weeks as the price of Brent crude in the international market continues a drop.

 

• With the recent official devaluation of the naira by the CBN, we expect the naira value of the landing price of LPG in Nigeria to stabilize in the coming day and weeks.
• The official devaluation of the naira might signal increases in domestic LPG prices in the weeks to come particularly coupled with the rise in inflation. We expect at least a 3 weeks lag period before the new exchange loss start to be reflected in retail prices.