Nigeria Liquefied Natural Gas Limited has pointed to vessel scarcity, fluctuations in foreign exchange rates, and soaring oil prices as the primary causes for the recent surge in cooking gas prices.
Market survey carried out revealed that as of the beginning of the month, the price of 20 metric tons of cooking gas at the terminal was N10m. However, as of October 20, the price had risen to N14m per 20 metric tons.
In an official statement released on Wednesday, NLNG explained how these factors, in conjunction with domestic macroeconomic developments and global influences, have led to a constriction in the supply of Liquified Petroleum Gas within the domestic market.
The company said, “The domestic LPG market, like any other, is subject to dynamic market forces and various external factors.
“Such factors as changes in exchange rates, escalating price benchmarks mirroring crude oil prices, and the Panama Canal drought-induced vessel scarcity impacting transport costs, especially for imported LPG, have had significant effects on energy prices in recent times and could undoubtedly be some of the reasons for recent price hikes witnessed in the domestic market’’.
NLNG disclosed that its efforts have played a pivotal role in the remarkable growth of the DLPG market, increasing from less than 50,000 metric tons of imported LPG in 2007 to over 1.3 million metric tons of both domestic and imported LPG today.
Despite the challenges posed by feed gas supply limitations, NLNG continues to actively participate in LPG deliveries, ensuring a consistent supply of cooking gas to consumers across the country.
“NLNG currently delivers over 450,000 metric tons per annum of Butane, the main product in cooking gas and has embarked on domestic propane supply to further grow the market.
“The Company has committed its entire Butane and Propane production to the domestic market from 2023 and despite feed gas challenges, continues to supply LPG to the domestic market, accounting for approximately 40 per cent of the total market volume.
“Since the beginning of the year, NLNG has delivered over 380,000 metric tons of LPG using the Company’s dedicated LPG vessel.
“NLNG maintains an unwavering commitment to ensuring the reliable supply of its LPG production to the domestic market at prices that are reflective of the market.
“The Company is collaborating with relevant industry stakeholders to achieve this objective and will remain focused on achieving its mission.”
Source: https://punchng.com/nlng-blames-high-cooking-gas-prices-on-forex/