Prices remained largely stable in the domestics and dropped in the international market for LPG in the immediately preceding week.
The fall in LPG prices at the international market continued through this week.
The drop in prices at the international market was greater than what was experienced last week. However, prices at the depots have, once again, remained generally stable, as with the previous week, suggesting fairly managed inventory risks.
Again, stability in the 'official' value of the naira is also contributing to the stability in the domestic price of LPG for the most part of the week under review until Friday when an official devaluation was announced.
Price disparity for 1 kg of LPG between what obtains at the international market level and the depots in Nigeria widens.
Regional disparities within the country has continued widening.
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 majority of depots in the country due to its proximity to the ocean, prices have been highest in the region.
We affirm much of the predictions of the previous week. Price stability will be slightly upset as the gains from the slight drop in LPG prices internationally might be significantly offset by the rising inflation levels and a continuous devaluation of the naira in the coming weeks.
A potential continuous drop in the value of the naira might signal increases in domestic LPG prices particular if such devaluation are followed by inflation. We expect a lag in the before this effect fully kicks in.