Prices became stable in the domestic and international markets for LPG in the immediately preceding week.

Key Developments in Nigeria's LPG Market
• The price of LPG in the international market did not experience a major change, and it seems to be stabilising.
• The consistent drop in prices, experienced last month, at the international market seems to have stopped for now, and prices are now stable. However, prices at the depots have, as usual, remained generally stable, as with the previous week. Both seem to be on the rise.
• Price disparity for 1 kg of LPG between what obtains at the international market level and the depots in Nigeria are generally stable.
• Regional disparities within the country continue to widen.

Regional Disparities in Prices
Regional disparity in the prices of LPG across the country has been a regular feature of the Nigerian LPG market. This gap has widened this week.. 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.

Macroeconomic Conditions & the Nigerian LPG Market
• International prices of crude oil experienced a sudden rise in the middle of the week under review.
• A continuous rise in the price of oil of crude oil may not be unexpected considering fresh moves by the U.S. and Russia to curtail supply glut. An immediate impact would be the further stability of the devalued naira as revenue rise.
• The consistent drop in the size of the country's foreign reserve and the current official devaluation of the naira is leading to an initial rise in the landing cost of LPG to Nigeria and subsequent stabilization of prices.
• A further rise in the country's reserve is expected in the coming weeks as the price of Brent crude in the international market continues a drop.

Outlook: Coming Weeks
• A slight fall in the volume of imported LPG may not be unexpected in the face of higher landing cost of LPG due to the exchange loses.
• The impact of the official devaluation of the naira might become increasingly obvious with a rise in the domestic LPG prices in the weeks to come particularly coupled with the rise in inflation.
• The current lockdown in the country is creating an early case of demand-pull inflation due to the shortage of supply occasioned by teh lockdown. We expect this to continue in the coming week.