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

 

 

In the immediately preceding week, the international prices for LPG sloped upward while domestic prices for LPG continue to fall

• The international prices of LPG in the previous week continued to rise from the beginning and reached their maximum level towards the end of the week, however, it ended on a fallen note.
• Depot prices continue to fall due to the federal government intervention to increase the local supply of LPG.
• Due to the increase in the foreign markets price, the price gaps between prices at the depot level and those at the international level continue to be widened.
• In the week under review, the price continues to decrease per kg of LPG and has been trending for the past few weeks.
• Due to transportation costs and proximity to the coast, disparities in LPG retail pricing still exist across the country.           A daily feature of the Nigerian LPG market was regional variance in LPG prices across the country. Because of the in price speculation and living style, the LPG in South-West region has the highest price.      
• • Inflation Rate and the LPG: Over the last 8 months, the rate of inflation has been steadily decreasing. It fell from 15.99% in October 2021 to 15.40% in November. The anticipated inflation rate for the month of December 2021 is 16.80%. The monetary measure put in place by the monetary authorities contributes to the fall in the rate of inflation trend. The composite food index reduced to 20.3% in August 2021 from 21.03% in July. It was 22.95% in March 2021 to 22.72% in April 2021, 20.57% in January 2021, 19.56% in December 2020, 15.48% in July 2020 compared to 15.18% in June 2020.
   
  • Exchange Rate and the LPG: The exchange rate continues to rise from the beginning to the end of the week. It ranged from 412.0 to 412.49 in the week due to the adjustment made by the CBN to stabilize the naira against the dollar. The exchange rate is one of the factors that influence LPG prices on the international market. A higher exchange rate would boost the price of LPG on the local market by a considerable amount. This means that the LPG market is in a state of flux, Figure E.
   
  • Crude oil price and the LPG: The relationship between LPG price and crude oil price remains positive, as a by-product of crude oil. Crude oil prices were at their lowest point at the end of the week after somewhat increases during the week. (Figure F). This shows that the price of crude oil has not been stable in the international market. This reflects variability in the market price for LPG.
   
  • Foreign Reserves: As in the previous week, the Nigerian Gross Foreign Reserve decreased slightly from $40.57 billion to $40.52 billion. This is due to the increase in supply of dollar from the reserve to stabilize the exchange rate.
   
  • 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 demand for goods and services to fall due to the full or partial lock-down effect. The implication of the Covid-19 contracts to 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 entails more campaigns and public awareness of the virus as people are easily carried away and relaxing. Vaccines for Covid-19 should be distributed without much delay if available.   The prices in the weeks to come may fall due to the increase in the local supply of LPG by the federal government

 

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  

 

 

Chief Timipre Sylva, Minister of State for Petroleum, says the federal government is working to increase the country's gas reserves from 206 trillion cubic feet to 600 trillion cubic feet. On Wednesday, Sylva gave the assurance at the 23rd World Petroleum Congress in Houston, Texas, United States. The minister spoke at a session titled "Regional Development and Opportunities in Africa," according to the Nigerian News Agency (NAN). According to him, the increase would place Nigeria among the countries with the world's largest gas reserves. According to him, Nigeria's 600 trillion cubic feet reserve will allow it to achieve the development that a gas nation requires. "In Nigeria, we have a lot of gas." There are currently 206 trillion cubic feet of gas reserves in the United States.   According to Iranian news agencies, a gas condensate pipeline at a gas refinery in southwestern Iran exploded on Thursday after being hit by an excavator, but no one was hurt and the line was shut down. There were no injuries, and rescue and operations personnel are on the scene, and the line has been cut off. A similar report was published by the semi-official Fars news agency. According to the semi-official YJC news agency, Mohammad Asgari, a spokesman for the National Iranian Gas Company (NIGC), the accident had no impact on gas production. Iran has the world's second-largest natural gas reserves, but production has lagged behind demand for heavily subsidized gas, owing in part to a lack of investment and foreign partners such as the United States.   According to the US Energy Information Administration, dry natural gas production in the United States will rise from 95.1 billion cubic feet per day (Bcf/d) in October 2021 to 97.5 Bcf/d in December 2022, a 2.4 Bcf/d increase (2.5 per cent). If realized, the forecast production level for December 2022 will surpass the previous high of 97.2 Bcf/d set in November 2019. Before COVID-19 was declared a pandemic, and before COVID-19-related declines in demand resulted in production declines to a low of 87.3 Bcf/d in May 2020. The November 2019 record was set. Since October 2020, dry natural gas production has been steadily increasing. Except for February, when a winter storm severely impacted oil and natural gas production in Texas, natural gas production remained above 92.0 Bcf/d in 2021.     Oil prices sank 3% to below $80 a barrel on Friday, as rising COVID-19 cases in Europe slowed the economic recovery, while investors considered the possibility of big economies releasing oil reserves to lower prices. Brent futures slid $2.35, or 2.9 percent, to $78.89 a barrel in January. On its penultimate day as the front-month, U.S. West Texas Intermediate (WTI) crude slid $2.91, or 3.6 percent, to $76.10. WTI was down around $2.65, or 3.4 percent, to $75.78 in January. This will shortly be the US front-month. For the first time since March 2020, both benchmarks fell for the fourth week in a row.         Following a competitive international tender process, Excelerate and Petróleo Brasileiro S.A. (Petrobras) signed the lease contract for TR-BA on September 28. Excelerate Energy Comercializadora de Gás Natural Ltda., Excelerate's wholly-owned subsidiary, expects to sell natural gas to a diverse portfolio of customers in this newly opened market. Following the success of the Moheshkhali Floating LNG Terminal in Bangladesh, Excelerate's streamlined terminal operations are the latest example of the Excelerate Flexible Integrated Terminal (E-FIT) offering. Excelerate has been providing regasification services to Petrobras' LNG terminals in Bahia, Guanabara Bay, and Pecém since 2012. At the Guanabara Bay LNG Regasification Terminal in 2020, the company's FSRU Experience set an industry record for send-out capacity, reaching 1.06 billion ft   According to GlobalData, natural gas production from the Marcellus and Utica shale plays in the United States will surpass 42 billion ft3/d by 2025, assuming gas prices remain above US$3.5 per million Btu. Despite the fact that North America is the largest gas producer and supplies roughly 40% of total natural gas production in the US, no new pipelines are expected to come online after 2023, according to the leading data and analytics company. "Environmental opposition in Pennsylvania, home to the majority of Appalachia basin production, created an onerous and exhausting approval process for pipeline operators," says Svetlana Doh, Senior Upstream Oil & Gas Analyst at GlobalData. Pipeline projects on the Atlantic Coast and in the PennEast have been canceled due to environmental concerns.   Sembcorp Marine Ltd has signed a contract with Bechtel Overseas Corporation (Bechtel) for module assembly of the second LNG train to be built at the Pluto LNG Project through its wholly-owned subsidiary, Sembcorp Marine Offshore Platforms Pte. Ltd. (SMOP). Pluto Train 2 will be completed in 2024, and Bechtel and SMOP will form an integrated management team to oversee the module assembly program. Pluto LNG is a single onshore LNG processing train that processes gas from the Pluto and Xena offshore fields and is located on the Burrup Peninsula near Karratha in Western Australia's northwest. Since its inception in 2012, Woodside has operated Pluto LNG in a safe and reliable manner. Pluto Train 2 will increase Pluto's current processing capacity by about a third.       Energy Transfer's midstream and gas transportation systems will be significantly strengthened by the addition of Enable's natural gas gathering and processing assets in Oklahoma's Anadarko Basin. Energy Transfer now owns and operates more than 114,000 miles of pipelines and related assets in all of the major U.S. producing regions and markets, spanning 41 states, solidifying its midstream leadership position. The transaction is immediately accretive to Energy Transfer and contributes to the company's deleveraging efforts. It also includes significant cash flows from fixed-fee contracts that are based on fees. In addition, excluding potential financial and commercial synergies, the combined operations of the two companies are expected to generate annual run-rate cost and efficiency synergies of more than $100 million.   Primoris Services Corporation has announced two new Master Service Agreements (MSA) for gas distribution projects in California, totaling more than $225 million. The Utilities Segment was in charge of securing the MSAs. "We've had long-standing relationships with both major utilities for over forty years," Tom McCormick, President and Chief Executive Officer of Primoris, said. "These multi-year master service agreements strengthen those ties and extend our MSA portfolio through 2026," says the company. A two-year MSA for a gas distribution program in northern California is the first agreement. A five-year MSA for a gas distribution program with a major utility customer in southern California is the second agreement.   UTM Offshore and the African Export-Import Bank (Afreximbank) have signed a memorandum of understanding (MoU) in support of a floating LNG (FLNG) project. On December 7, UTM CEO Julius Rone and Afreximbank president and chairman Benedict Oramah signed a Memorandum of Understanding, according to a company statement. The agreement covers a $2 billion capital raise. The bank also pledged $3 billion to fund a second phase of the FLNG project. Afreximbank will support a final investment decision (FID) in the future, according to the Nigerian company. The goal, according to the company, is to reach first LNG in 2026. The Yoho field is held by OML 104, and UTM's project is based on an FLNG vessel there. Mobil Producing Nigeria is the operator of OML 104.     THE Senate Committee on Local Content threatened to sanction Saipem SPA yesterday for failing to provide evidence in connection with several petitions it had received alleging that the firm had violated the Local Content Law in the execution of the Train-7 Project. Mr. Yeon Seop Jung, Daewoo Engineering and Construction Limited's Deputy Managing Director, who had appeared in place of the company's Managing Director, was also escorted out by the committee. The Senate's committee had invited Daewoo and Saipem's Managing Director to testify after receiving several petitions alleging violations of the Local Content Law. The Nigerian Liquefied and Natural Gas, NLNG, Company owns the Train-7 project, which is the country's largest gas project, valued at around $10 billion.       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

 

 

Prices on the international market for LPG fluctuated 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 towards the end of the previous week.
• Depot prices were on the fallen note in the preceding week with a minimum of N552.50 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 experienced somewhat fluctuation and ranged from 411.72 to 411.91/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 towards 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 $41.40 billion to $41.30 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 US 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

 

In the immediately preceding week, the international prices for LPG sloped upward while domestic prices for LPG were sloped downward

• The international prices of LPG in the previous week continued to rise from the beginning till the end of the week.
• Depot prices were on a fallen note throughout the week.
• Due to the increase in the foreign markets price, the price gaps between prices at the depot level and those at the international level became widened.
• In the week under review, the price continues to increase per kg of LPG and has been trading for the past few weeks.
• Due to transportation costs and proximity to the coast, disparities in LPG retail pricing still exist across the country.             A daily feature of the Nigerian LPG market was regional variance in LPG prices across the country. Because of the in price speculation and living style, the LPG in South-West region has the highest price.    
• • Inflation Rate and the LPG: Over the last 8 months, the rate of inflation has been steadily decreasing. It fell from 16.63% in September 2021 to 15.99% in October. The anticipated inflation rate for the month of September is 16.80%. The monetary measure put in place by the monetary authorities contributes to the fall in the rate of inflation trend. The composite food index reduced to 20.3% in August 2021 from 21.03% in July. It was 22.95% in March 2021 to 22.72% in April 2021, 20.57% in January 2021, 19.56% in December 2020, 15.48% in July 2020 compared to 15.18% in June 2020.
   
  • Exchange Rate and the LPG: The exchange rate continues to rise from the beginning tohe end of the week. It rose from 411.73 to 411..75 in the week due to the adjustment made by the CBN to stabilize the naira against the dollar. The exchange rate is one of the factors that influence LPG prices on the international market. A higher exchange rate would boost the price of LPG on the local market by a considerable amount. This means that the LPG market is in a state of flux, Figure E.
   
  • Crude oil price and the LPG: The relationship between LPG price and crude oil price remains positive, as a by-product of crude oil. Crude oil prices were at their highest point in the middle of the week despite a fall towards the end of the week. (Figure F). This shows that the price of crude oil has not been stable in the international market. This reflects variability in the market price for LPG.
   
  • Foreign Reserves: As in the previous week, the Nigerian Gross Foreign Reserve decreased slightly from $41.08 billion to $40.90 billion. This is due to the increase in supply of dollar from the reserve to stabilize exchange rate.
   
  • 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 demand for goods and services to fall due to the full or partial lock-down effect. The implication of the Covid-19 contracts to 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.

• Inflation Rate and the LPG: Over the last 8 months, the rate of inflation has been steadily decreasing. It fell from 16.63% in September 2021 to 15.99% in October. The anticipated inflation rate for the month of September is 16.80%. The monetary measure put in place by the monetary authorities contributes to the fall in the rate of inflation trend. The composite food index reduced to 20.3% in August 2021 from 21.03% in July. It was 22.95% in March 2021 to 22.72% in April 2021, 20.57% in January 2021, 19.56% in December 2020, 15.48% in July 2020 compared to 15.18% in June 2020.

 

• Exchange Rate and the LPG: The exchange rate continues to rise from the beginning tohe end of the week. It rose from 411.73 to 411..75 in the week due to the adjustment made by the CBN to stabilize the naira against the dollar. The exchange rate is one of the factors that influence LPG prices on the international market. A higher exchange rate would boost the price of LPG on the local market by a considerable amount. This means that the LPG market is in a state of flux, Figure E.

 

• Crude oil price and the LPG: The relationship between LPG price and crude oil price remains positive, as a by-product of crude oil. Crude oil prices were at their highest point in the middle of the week despite a fall towards the end of the week. (Figure F). This shows that the price of crude oil has not been stable in the international market. This reflects variability in the market price for LPG.

 

• Foreign Reserves: As in the previous week, the Nigerian Gross Foreign Reserve decreased slightly from $41.08 billion to $40.90 billion. This is due to the increase in supply of dollar from the reserve to stabilize exchange rate.

 

• 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.

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

 

The prices in the weeks to come may rise due to the effect of an increase in the LPG price level from depot even though the month-on-month rate of inflation is reducing.

 

 

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

 

 

Prices on the international market for LPG fluctuated 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 towards the end of the previous week.
• Depot prices were on the fallen note in the preceding week with a minimum of N552.50 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 seven months. It fell from 16.63% in September to 15.99% in October 2021, (See Illustration D). Coupled with the high prices of goods and services in the month of November 2021, the expected inflation rate is 17.2%. 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 experienced somewhat fluctuation and ranged from 411.63 to 411.64/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 were stable in the middle of the week. however, there was a sharp decrease at the end of the previous week (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 $41.40 billion to $41.30 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 US 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

 

In the face of persistent underperformance this year, the federal government announced that it was rebuilding the upstream industry in order to increase crude oil production by 100% to 3.0 million barrels per day, up from an average of 1.5 million this year. Despite missing the planned reserve deadline of December 2020, the government expressed its commitment to achieving 40 billion barrels of oil reserves. Chief Executive, Nigerian Upstream Petroleum Regulatory Commission, Engr. Gbenga Komolafe said the targets were hampered by a number of issues, including oil theft, insecurity, and ageing facilities while speaking at the Nigerian Association of Petroleum Explorationists (NAPE) International Conference and Exhibition in Lagos.   It was reported by Reuters that Electric grids should enhance cold weather restrictions and communicate with the natural gas industry, according to US power reliability authorities, to avoid a repeat of the February freeze that left millions in Texas without power for days. This year has seen multiple extreme weather events in the United States, including a February cold and record-breaking heat in the Pacific Northwest this summer. On Tuesday, the Federal Energy Regulatory Commission (FERC) and the North American Electric Reliability Corporation (NERC) released their final assessment on the February freeze, which was also known as Winter Storm Uri.   Reuters reported based on the outcomes of pipeline capacity auctions that Ukraine's state-run gas transmission system operator said on Wednesday that there was no indication that Russian energy giant Gazprom planned to send additional gas to the European Union next year. According to Makogon Kyiv, is using electricity as a weapon against Europe. Moscow denies this and has stated numerous times that it is meeting its gas deal requirements. "Gazprom does not aim to boost gas supply to the EU in December or the first quarter of 2022, based on auction results," the operator's head Sergiy Makogon wrote on Facebook.   The Pennsylvania Public Utility Commission (PUC) accepted a roughly $2 million settlement with a subsidiary of Energy Transfer LP for a pipeline explosion and fire in Western Pennsylvania in 2018. On Sept. 10, 2018, a section of the 24-inch (61-centimeter) Revolution pipe failed after heavy rains created a landslide in Beaver County's Center Township. According to the PUC, the fire destroyed a nearby residence, damaged electricity lines, and burned many acres of surrounding woodland. A $1 million civil penalty is included in the agreement, as well as around $975,000 in additional safety-related measures, such as improved pipeline start-up procedures. According to local media, the 40.5-mile (65-kilometer) pipeline was being put into service at the time of the event.     Reliance Industries Ltd (RELI.NS) of India said on Friday that it had chosen to reconsider Saudi Aramco's (2222.SE) proposed $15 billion investment in Reliance's oil-to-chemicals (O2C) business. The sale of a 20% share in the unit was planned for 2019, but was postponed owing to the pandemic, which caused oil prices and demand to plummet last year. Meanwhile, earlier this year, Reliance announced plans to invest 600 billion rupees ($8.08 billion) in Jamnagar to develop four "giga factories" to make solar cells and modules, energy storage batteries, fuel cells, and green hydrogen. A large portion of the oil-to-chemicals assets are located in western India. "In light of the new circumstances, Reliance and Saudi Aramco have mutually concluded that it would be beneficial for both parties to re-evaluate the proposed investment in O2C business," Reliance stated on Friday.   GIP, a major independent infrastructure investor, has agreed to sell its 25.7 percent stake in Freeport LNG Development, L.P. (Freeport) to JERA Americas Inc. for US$2.5 billion, subject to customary purchase price adjustments. Global Infrastructure Partners II, GIP's second flagship fund, purchased the stake in 2015. JERA Americas Inc. is a subsidiary of JERA Co., Inc. (JERA), the world's largest LNG importer, based in the United States. JERA owns 25% of Freeport LNG Train 1 and acquires and transports 2.32 million tpy of LNG for usage in Japan and other LNG-importing nations through its subsidiaries. The acquisition is subject to usual regulatory clearances and closing conditions before it may be completed.     The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has announced that all approved Field Development Plans (FDPs) will now include full gas utilization and monetization programs, in order to ensure that the country benefits from the recently concluded United Nations Conference of Parties (COP 26). Upstream investors have previously focused primarily on oil exploration and production, with little or no plans for gas development. The development has resulted in the gas sector's slow growth and retardation, with more oil companies burning gas rather than monetizing it, and the same can be said for the development of that key business capable of turning the country's fortunes around.     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

 

 

In the immediately preceding week, there were reductions in the prices of the foreign market while domestic prices for LPG were stable

• The international prices of LPG in the previous week continued to fluctuate at decreasing rate from the beginning till the end of the week.
• Depot prices were stable at the middle of the week. however, they were on a fallen note at the end of the week.
• Despite a somewhat higher price in foreign markets price, the price gaps between prices at the depot level and those at the international level have remained consistent.
• In the week under review, the price continues to increase per kg of LPG and has been trading for the past 8 weeks.
• Due to transportation costs and proximity to the coast, disparities in LPG retail pricing still exist across the country.         A daily feature of the Nigerian LPG market was regional variance in LPG prices across the country. Because of the in price speculation and living style, the LPG in South-West region has the highest price.      
• • Inflation Rate and the LPG: Over the last 8 months, the rate of inflation has been steadily decreasing. It fell from 16.63% in September 2021 to 15.99% in October. The anticipated inflation rate for the month of September is 16.80%. The monetary measure put in place by the monetary authorities contributes to the fall in the rate of inflation trend. The composite food index reduced to 20.3% in August 2021 from 21.03% in July. It was 22.95% in March 2021 to 22.72% in April 2021, 20.57% in January 2021, 19.56% in December 2020, 15.48% in July 2020 compared to 15.18% in June 2020.
   
  • Exchange Rate and the LPG: The exchange rate continues to rise from the tbeginning tohe end of the week. It rose from 411.43 to 411..59 in the week due to the adjustment made by the CBN to stabilize the naira against the dollar. The exchange rate is one of the factors that influence LPG prices on the international market. A higher exchange rate would boost the price of LPG on the local market by a considerable amount. This means that the LPG market is in a state of flux, Figure E.
   
  • Crude oil price and the LPG: The relationship between LPG price and crude oil price remains positive, as a by-product of crude oil. Crude oil prices fluctuated at decreasing rate during the week. (Figure F). This shows that the price of crude oil has not been stable in the international market. This reflects variability in the market price for LPG.
   
  • Foreign Reserves: As in the previous week, the Nigerian Gross Foreign Reserve decreased slightly from $41.507 billion to $41.405 billion. This is due to an decrease in the price of oil.
   
  • 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 demand for goods and services to fall due to the full or partial lock-down effect. The implication of the Covid-19 contracts to the LPG market   Reducing the effect of the Covid-19, entails more campaign and public awareness of the virus as people are easily carried away and relaxing. Vaccines for Covid-19 should be distributed without much delay if available.     The prices in the weeks to come may rise due to the effect of an increase in the LPG price level from depot even though the month-on-month rate of inflation is reducing.     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

 

 

 

Prices on domestic markets for LPG continue to rise, however, they sloped downward in the international markets in the same week.

• The international prices of LPG were on a fallen note in the previous week after reaching their peak on Tuesday.
• Depot prices continued to increase throughout the week compared to the previous week.
• The narrowing disparities between prices at the depot level and those at the international level still persist.
• Price changes per kg of LPG in the week under review and in the past few weeks have increased in the week under review.
• 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. There is a wide gap between the South East and South-west prices, this is due to its distance from the coastal region, has the highest prices due to distance from the coastal regions.    

• Inflation Rate and the LPG: Inflation has consistently fallen over the last seven months. It fell from 16.63% in September to 15.99% in October 2021, (See Illustration D). Coupled with the high prices of goods and services in the month of November 2021, the expected inflation rate is 17.2%. 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: Exchange rate value from the CBN official site ranged from N411.32/$1 rate to 411.42/$1 in the previous week. (Figure E). This followed the CBN action to stabilise the economy. The exchange rate is one of the variables that determine the price of LPG in the international market. A higher exchange rate will add to the cost price of the LPG. This reduces LPG in the market.

 

• Crude oil price and the LPG: As a by-product of crude oil, the relationship between the LPG price and crude oil price is positive. The Prices of crude oil in the international market fluctuated at decreasing rate throughout the week. (Figure F). This indicates the unstable price of crude oil in the international market results in imbalances in the cost of LPG. This signal a rise in the price of the LPG market.

 

• Foreign Reserves: Compare to the previous week, the Nigerian Gross Foreign Reserve decreased from $41.70 billion to $41.50 billion amid falls in the crude oil prices and rising rate of the Naira at N411.32 to 411.42/US$1. This will signal to the investors and the country's creditors the strength of naira and the ability to repay debt.

 

• PMI: The Purchasing Managers Index (PMI) of the CBN recorded overall growth in jobs, business activities, and inventory in the gas sector in December, while orders remained stagnant in the Electricity, gas, steam & air conditioning supply segment, while Business Activities and employment & inventory remained 45.7 per cent in the same month.

• Inflation Rate and the LPG: Inflation has consistently fallen over the last seven months. It fell from 16.63% in September to 15.99% in October 2021, (See Illustration D). Coupled with the high prices of goods and services in the month of November 2021, the expected inflation rate is 17.2%. 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: Exchange rate value from the CBN official site ranged from N411.32/$1 rate to 411.42/$1 in the previous week. (Figure E). This followed the CBN action to stabilise the economy. The exchange rate is one of the variables that determine the price of LPG in the international market. A higher exchange rate will add to the cost price of the LPG. This reduces LPG in the market.

 

• Crude oil price and the LPG: As a by-product of crude oil, the relationship between the LPG price and crude oil price is positive. The Prices of crude oil in the international market fluctuated at decreasing rate throughout the week. (Figure F). This indicates the unstable price of crude oil in the international market results in imbalances in the cost of LPG. This signal a rise in the price of the LPG market.

 

• Foreign Reserves: Compare to the previous week, the Nigerian Gross Foreign Reserve decreased from $41.70 billion to $41.50 billion amid falls in the crude oil prices and rising rate of the Naira at N411.32 to 411.42/US$1. This will signal to the investors and the country's creditors the strength of naira and the ability to repay debt.

 

• PMI: The Purchasing Managers Index (PMI) of the CBN recorded overall growth in jobs, business activities, and inventory in the gas sector in December, while orders remained stagnant in the Electricity, gas, steam & air conditioning supply segment, while Business Activities and employment & inventory remained 45.7 per cent in the same month.

 

 

 

• Covid-19: Covid-19 causes 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.

• High LPG Price: The extremely high price of LPG reduced the size of LPG marketers from the depot. This further resulted in the high price per Kg at the LPG local markets. Households were observed using firewood as a source of cooking energy without considering the health hazards.

• To reduce the effect of the Covid-19 on the economy, there should be a constant awareness programme through the media and places of worship; and also vaccine for Covid-19 should be made available for everybody   The prices in the weeks to come may rise due to the further increase from the depot     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
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