Why Cooking Gas Price is Rising – Nigeria Liquefied Natural Gas (NLNG)
At the scene of the sustained upturn in the prices of cooking gas, Nigeria Liquefied Natural Gas (NLNG) Limited, has stipulated that three main factors around the domestic macroeconomic developments as well as global factors combined to compel enough supply in the local market. The firm also stipulated that it would assist the market with about 1.3 million metric tons.
In a report yesterday, the company stated, “The local LPG market like any other, is subject to dynamic market forces and various external factors. Such factors as changes in exchange rates, spreading 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 the current times and could undoubtedly be some of the reasons for recent price hikes witnessed in the domestic market”.
Meanwhile, the average price of 1kg cooking gas has risen up by 61 percent to N1,200 from N696 it sold in June 2023.
Amongst the constraints, NLNG Limited said its 1.3mmt supply is aimed at decreasing importation while meeting the increasing demand for the product in the country.
It is said: that NLNG has been making contributions to the local LPG market, encouraging the steady growth of the nation’s DLPG market volume from less than 50,000 metric tons of imported LPG in 2007 to over 1.3 million metric tons of both local and imported LPG today”.
It went further to state: “NLNG recently 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 local market, accounting for approximately 40% 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 local 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”.