WLPGA REPORT ON THE GLOBAL LPG INDUSTRY IN 2023.

According to the World LPG Association’s 2023 annual report, global production of LPG exceeded global demand by a slight margin of 2 million metric tons. In the U.S., 90 percent of LPG production comes from gas processing. The residential market accounts for 45 percent of global LPG demand, and the majority of that demand comes from the Asia-Pacific region. North America is the largest regional consumer of LPG for agriculture, but agriculture accounts for less than 1 percent of global LPG consumption. Demand for LPG in Canada rose 25.2 percent across all markets. 

Nigeria's LPG Market: A Microcosm of Global Forces

Zooming into Nigeria's LPG market, the global dynamics manifested in unique ways, weaving a narrative that reflected both international trends and local intricacies. In Nigeria, gas consumption had experienced a decline of an estimated 3%, amounting to 14 billion cubic meters (bcm) in 2022 according to the Agustore 2023 gas industry report. This decrease was primarily attributed to supply chain disruptions caused by persistent pipeline vandalism and force majeure declared by gas producers due to severe flooding, leading to gas supply shortages and exerting upward pressure on prices.

Moreover, Nigeria's heavy reliance on imports to meet over 50% of its domestic LPG consumption exacerbated the adversities faced by industry operators due to foreign exchange scarcity. This further contributed to the rise in LPG prices, subsequently dampening domestic consumption. Despite these challenges, the Nigerian gas industry, poised for long-term expansion, is expected to witness a 5% average annual increase in gas demand, reaching 16 billion cubic meters (bcm) by 2025.

This growth is anticipated to be driven by rising investments in gas-based industries, government-led reforms promoting cleaner and sustainable energy sources, the nation's burgeoning population, and a high rate of urbanization, facilitating gas demand in the power, industrial, and transportation sectors. Furthermore, the recent implementation of the new Petroleum Industry Act (PIA) has brought about significant restructuring within Nigeria's oil and gas industry. The establishment of a new legal, regulatory, and fiscal framework is expected to attract investments in midstream gas infrastructure and increase gas supply to strategic sectors.

The commentary from the World LPG Association's 2023 annual report painted a vivid picture of the global LPG market's intricacies. From the unique production landscape in the U.S. to the contrasting demand patterns in North America and the Asia-Pacific, each element contributed to the delicate equilibrium of the market.

In Nigeria, this global tapestry unfolded on a microcosmic scale, with local policies and regional factors weaving into the broader international narrative. As we delve deeper into the interplay of global and local forces, the journey of LPG in 2023 becomes a testament to the interconnectedness of markets, where a surplus in one corner of the world can send ripples across continents, shaping the fortunes of nations and influencing the daily lives of consumers.

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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.