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WEEKLY LPG INSIDER REPORT


Prices have shown a slight increase in the international and domestic markets for LPG in the immediately preceding week
 

  • International(Mont Belvieu) prices of LPG started a slight upward trend till the middle of the week when the price experienced a sharp rise towards the end of the week, then remained static thereof as it was, during the same day in the previous week.

  • Prices of LPG at the depot level showed a slightly different trend compared to the previous week. The price difference between the Mont Belvieu and depot prices are slightly narrower through the week compared to the previous week under review.

  • Compared with the previous week, the difference between depot prices per kg of LPG and retail prices in Nigeria has not changed much. The retail prices fell through the week, like the depot prices.

  • Regional disparities continue to persist in the retail prices of LPG within the country.




 
 

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.


 

  • There was a slight increase in the exchange rate value of the naira at N381 to US.$1 in the beginning of the week but return to the previous week value thereof, and pegged at N380 to US.$1 for the remaining days of the week (Figure D), though disparities continue to widen in the parallel market.

  • Nigeria's foreign reserve is continuing to experience a rise as in the previous week. The continuous rise has been the trend since the devaluation and pegging of the Naira at N380 to US$1.

  • For the gas market, the Purchasing Managers Index (PMI) of the CBN report declining Business Activities, and New Orders, and employment & inventory for the month of September 2020 compared to August. The declining trend in new orders and employment are faster than those in business activities and inventory.

  • Inflation remains high. The persistent rise in inflation in the past more than 11 months (in August 13.2%, July 12.8%, June at 12.6% from the 12.4% recorded in May 2020) has implications for the price of LPG across the country. More importantly, the composite food index rose by 15.48% in July 2020 compared to 15.18% in June 2020.

  • Prices of crude oil in the international market fluctuated throughout the week as oil workers in the Norway Continue strike. (Figure E).

     


 

 
 

  • We expect LPG prices to continue to fluctuate considering the effect of Hurricane in the US at the Gulf of Mexico and the coming U.S Elections.

  • We also expect a more than proportionate rise in LPG prices at the retail level (as the cost of transportation rises due to the hike in fuel prices coupled with inflation) compared to the depot/international prices in the coming weeks.

     

    Kindly book for 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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