NLNG ATTRIBUTES THE ELEVATED PRICE OF LPG TO FOREX

By Oluwabukola Jimoh ــ Last Update 16 November 2023

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The recent surge in cooking gas prices has been attributed by Nigeria Liquefied Natural Gas Limited (NLNG) to a combination of factors, including vessel scarcity, fluctuations in foreign exchange rates, and the rise in oil prices. According to a market survey, the cost of 20 metric tons of cooking gas at the terminal increased from N10 million at the beginning of the month to N14 million as of October 20.

In an official statement released on Wednesday, NLNG highlighted how these factors, along with domestic macroeconomic developments and global influences, have led to a reduction in the supply of Liquefied Petroleum Gas in the domestic market. The company acknowledged the dynamic nature of the domestic LPG market, with changes in exchange rates, escalating price benchmarks tied to crude oil prices, and vessel scarcity due to the Panama Canal drought affecting transport costs, especially for imported LPG.

Despite these challenges, NLNG emphasized its role in the significant growth of the domestic LPG market, which has expanded from less than 50,000 metric tons in 2007 to over 1.3 million metric tons of both domestic and imported LPG today. The company revealed its commitment to supplying over 450,000 metric tons per annum of Butane, the primary component in cooking gas, with plans to enhance the market through domestic propane supply.

NLNG assured its dedication to delivering its entire Butane and Propane production to the domestic market from 2023, accounting for approximately 40% of the total market volume. Despite feed gas challenges, NLNG has delivered over 380,000 metric tons of LPG since the beginning of the year using its dedicated LPG vessel. The company remains committed to ensuring a reliable supply of its LPG production to the domestic market at market-reflective prices, collaborating with industry stakeholders to achieve this objective.

Source: Punch News.

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Oluwabukola Jimoh

Oluwabukola Jimoh is a dynamic academic writer and captivating energy blogger. She is able to delve into intricate subjects with an insatiable thirst for knowledge, crafting thought-provoking essays that engage and enlighten her readers.