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Sharing Ideas and Updates on LPG in Nigeria and related information to enable effective collaboration within the LPG Value Chain
LPG Price Movement Vs Dollar Price - December 2023 To April 2024
LPG Price Movement Vs Dollar Price - December 2023 To April 2024
The LPG (cooking gas) market in Nigeria experienced notable price movements from December 2023 to April 2024, closely tied to the performance of the dollar. Understanding this correlation is vital for traders and stakeholders to anticipate price changes and make informed decisions.
LPG Price Movement vs Dollar Price
December 2023:
Lowest Price: 15,221,428.57
Highest Price: 16,105,000
Worst USD to NGN exchange rate: $1 = ₦ 764.5
Best USD to NGN exchange rate: $1 = ₦ 897.5
Average USD to NGN exchange rate: $1 = ₦ 805.28
January 2024:
Worst USD to NGN exchange rate: $1 = ₦ 871.44
Best USD to NGN exchange rate: $1 = ₦ 958.05
Average USD to NGN exchange rate: $1 = ₦ 909.73
LPG prices continued their upward trend from December, reflecting the Naira's fluctuating exchange rate against the dollar.
February 2024:
Worst USD to NGN exchange rate: $1 = ₦ 905.00
Best USD to NGN exchange rate: $1 = ₦ 1,597.77
Average USD to NGN exchange rate: $1 = ₦ 1,402.07
A significant surge in LPG prices was observed, with rates reaching up to 22,160,000. This rise could be attributed to increased demand or heightened import costs, paralleling the dollar's fluctuating performance.
March 2024:
Worst USD to NGN exchange rate: $1 = ₦ 1,329.29
Best USD to NGN exchange rate: $1 = ₦ 1,599.61
Average USD to NGN exchange rate: $1 = ₦ 1,512.14
LPG prices stabilized within the 20,400,000 to 21,433,333.33 range, possibly indicating a steadier dollar or a balanced market demand and supply.
April 2024:
Worst USD to NGN exchange rate: $1 = ₦ 1,139.52
Best USD to NGN exchange rate: $1 = ₦ 1,306.50
Average USD to NGN exchange rate: $1 = ₦ 1,216.76
Prices at the beginning of April hovered around 20,400,000, with fluctuations observed towards month-end, mirroring the dollar's slight volatility.
To analyze the trend between changes in depot prices and fluctuations in the Naira/USD exchange rates over the specified period, we can observe the following:
December 2023:
The depot price was 16,105,000 NGN, while the Naira/USD exchange rate was 897.5.
This period shows a relatively lower depot price with a moderate exchange rate.
January 2024:
The depot price increased to 21,168,750 NGN, accompanied by a slight increase in the Naira/USD exchange rate to 958.05.
Both depot prices and exchange rates experienced an uptick compared to December.
February 2024:
The depot price decreased to 19,000,000 NGN, while the Naira/USD exchange rate saw a significant surge to 1,597.77.
Interestingly, despite the decrease in depot price, the exchange rate skyrocketed, indicating a sharp depreciation of the Naira against the US dollar.
March 2024:
The depot price increased again to 21,433,333.33 NGN, aligning with a further increase in the Naira/USD exchange rate to 1,599.61.
Both depot prices and exchange rates continued their upward trajectory.
April 2024:
The depot price slightly decreased to 16,961,111.11 NGN, while the Naira/USD exchange rate decreased to 1,306.50.
Despite the decrease in both depot prices and exchange rates compared to March, the overall trend for the period remains upward, with fluctuations in both variables.
Correlation Analysis:
There seems to be a positive correlation between depot prices and the Naira/USD exchange rates during this period. As depot prices increase, the Naira weakens against the US dollar, and vice versa.
The notable exception is in February 2024, where despite a decrease in depot prices, the Naira experienced significant depreciation against the dollar. This divergence could be due to various factors such as changes in market dynamics, demand-supply imbalances, or external economic factors.
Overall, the trend suggests a complex interplay between local market dynamics and international currency fluctuations, influencing depot prices in Nigeria.
Our Recommendations - LPG in Nigeria
Traders and stakeholders should prioritize monitoring CBN's forex policy pronouncements. Changes or updates from the CBN can directly influence the dollar's value, subsequently impacting LPG prices in Nigeria. Alongside this, keeping an eye on Mont Belvieu prices, an international LPG benchmark, is crucial. Fluctuations in these global prices can ripple into the Nigerian market.
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