According to NALPGAM, an LPG marketers’ association, limited supply locally as well as threats from the international energy market are responsible for rising prices of Liquefied Petroleum Gas, LPG, across Nigeria presently.
Edu Inyang, the NALPGAM president, explained that domestic supply has been hampered especially from the Dangote Refinery, thus making it difficult for marketers to access LPG.
“Securing the product has become more challenging, and allocations are no longer as frequent as before,” he said. “Some off-takers have gone for extended periods without supply, while those with access are responding to prevailing demand conditions.”
He went on to state that Nigeria LNG Ltd had been sending in LPG at a higher cost which was also raising depot prices. Inyang noted that changing international energy markets are impacting domestic prices.
“Nigeria is not insulated from global energy shocks,” he said. “Fluctuations in international prices inevitably affect local LPG costs.”
As per Inyang, the private depot operators are bound by operational charges and landing charges which get passed on to the consumers thereby preventing sales below cost.
Inyang said although there are price pressures at the moment, additional investment in gas infrastructure should help stabilize supply and price over time. He advocated for more gas processing plants and greater participation by private sector players to boost domestic production.
“Similar cycles have occurred before,” he noted. “With adequate investment and expansion of existing and upcoming gas projects, supply will improve, and prices are likely to stabilize.”
