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WEEKLY LPG INSIDER REPORT


Prices on the international market are continuing to increase and have stayed steady in the domestic market for LPG in the immediately preceding week it.

  • Price of LPG in the international market increased from the beginning of the week towards the end of the week. However, it ended at a lower price compared to the price towards the end of the week.

  • Week-on-week differences in the price of LPG at the depot level have not changed much in the week under review.

  • The difference between prices per kg of LPG at the depots in Nigeria and prices at the international market are becoming narrower as was recorded from the previous few weeks.

  • 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.

 

 

  • Exchange rate value still persistent at N380 to US.$1 throughout the week (Figure D), though disparities continue to widen in the parallel market.

  • As in the previous week, the Nigerian Foreign Reserve continues to rise. After the devaluation and pegging of the Naira at N380 to US$1, the steady increase has been persistent.

  • 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 September 13.7%, 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 16.16% in September from 16.0% in August, 15.48% in July 2020 compared to 15.18% in June 2020.

  • The Prices of crude oil in the international market increased till the middle of the week and decreased thereafter till the end of the week (Figure E).

     

     

    • We expect LPG prices to continue to fluctuate considering the impact on the US effect of the Hurricane in 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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