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Prices have shown a downward trend in the international and domestic markets for LPG in the immediately preceding week till the middle of the week when the price was constant thereof to the end of the week.

kiakiagas:
Prices have shown a slight rise in the international and domestic markets for LPG in the immediately preceding week.

the effect is glaring

Key Development in Nigeria.

International(Mont Belvieu) prices of LPG started a downward trend till the middle of the week when the price was constant thereof to the end of the week compared to the same day in the previous week.

Prices of LPG at the depot level showed a slightly different trend compared to the previous week. No price was recorded at the depot level on the 10/1/2020 due to public holiday, however retail price for the day remains the same as in previous days: the price difference between the Mont Belvieu and depot prices are slightly narrower compared to the previous week under review through the week under review.

The difference between prices per kg of LPG at the depots and retail prices in Nigeria has not changed much compared to the previous week. Like the depot prices, retail prices fell through the week.

Regional disparities in the retail prices of LPG within the country continue to persist.

Regional Disparity in Retail.
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.

Macroeconomics Condition and the LPG Market.
The exchange value of the naira to the US$ has remained at the pegged price of N380 to US.$1 throughout the week (Figure D) though disparities continue to widen in the parallel market.
Nigeria's foreign reserve is continuing to experience a rise as in the previous week. The continuous rise has been the trend since the devaluation and pegging of the naira at N380 to US$1.
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 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 15.48% in July 2020 compared to 15.18% in June 2020.
Prices of crude oil in the international market in the week under review showed a falling trend, towards the end of the week (Figure E).

Outlook: Coming Weeks
We expect LPG prices to continue to fluctuate considering 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.

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