Prices have shown a slight rise in the international and domestic markets for LPG in the immediately preceding week .
International(Mont Belvieu) prices of LPG ended on a slightly lower note in the week under review. The Mont Belvieu prices are continuing to drop from the level recorded last week.
Prices of LPG at the depot level in the week under review have not changed much from what was recorded in the previous week.
Similar to the previous week, we see a general drop in prices across the value chain in the domestic market with a continuous narrowing of the gap between the Mont Belvieu prices and the depot prices.
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. 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.
The exchange value of the naira to the US. $ remained at the pegged rate of N380 to US.$1 throughout the week (Figure D).
For the gas market, though the Purchasing Managers Index(PMI) of the CBN report declining inventory, new orders and employment for the month of June 2020, the decline is lower for the month of June compared to the month of May.
Inflation is continuing its rise consistently for more than 6 months. The latest report from the Nigeria Bureau of Statistics(NBS) shows that the headline inflation rate settled at a 27-month high of 12.82% y/y for the month of July, 26bps up from 12.56% y/y in June. The combined rise in LPG prices in the international market and the recent inflationary trend might mean higher overall prices in the weeks and months to come.
The NBS also reports that there is a 6.10% decline y/y in real GDP growth for the 2020 Q2 GDP. Much of the decline would have come from the COVID-19 pandemic-induced lockdown.
Prices of crude oil in the international market in the week under review flunctuated after an initial rise (Figure E).
The continuous oversupply situation in the international market for Natural gas will likely lead to a continuous drop in prices in the weeks to come.
The weeks to come may witness a gradual and slight drop in inflation as the army of liquidity facilities deployed by the CBN start to have a visible impact on economic activities as the country reaches its first month of the reponed economy.
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