The reason behind the soaring price of cooking gas, explained by NLNG
•Commits to maintaining the continuous supply of over 1.3 million metric tons to the local market
Against the backdrop of the consistent rise in cooking gas prices, the Nigerian LNG Limited has highlighted that three key factors, encompassing domestic macroeconomic developments and global factors, have converged to hinder sufficient supply in the local market.
The company also affirmed its commitment to providing the market with around 1.3 million metric tons.
In a statement released yesterday, the company noted, "The domestic LPG market, like any other, is subject to dynamic market forces and various external factors. Factors such as changes in exchange rates, escalating price benchmarks reflecting crude oil prices, and the Panama Canal drought-induced vessel scarcity impacting transport costs, especially for imported LPG, have significantly affected energy prices recently and could undoubtedly be some of the reasons for the recent price hikes witnessed in the domestic market."
Meanwhile, the average price of 1kg cooking gas has surged by 61 percent to N1,200 from the N696 it sold for in June 2023.
Despite these challenges, NLNG Limited mentioned that its 1.3 million metric ton supply aims to reduce importation while meeting the growing demand for the product in the country.
The company stated, "NLNG has been making contributions to the domestic LPG market, spurring the steady growth of the nation’s DLPG market volume from less than 50,000 metric tonnes of imported LPG in 2007 to over 1.3 million metric tons of both domestic and imported LPG today.
"NLNG currently delivers over 450,000 metric tonnes 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% of the total market volume. Since the beginning of the year, NLNG has delivered over 380,000 metric tonnes of LPG using the Company’s dedicated LPG vessel."
"NLNG is steadfast in its commitment to ensuring the consistent supply of its LPG production to the domestic market at prices reflective of market conditions. The company is actively collaborating with pertinent industry stakeholders to accomplish this goal and will stay dedicated to achieving its mission."
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