As the high price of cooking gas continues to bite harder on Nigerians, the Nigerian LNG Limited, has revealed the rationale behind the development.
The NLNG indicated that three major factors around the domestic macroeconomic developments as well as global factors have combined to constrain adequate supply in the domestic market.
The firm also noted that it would sustain the market with about 1.3 million metric tones.
In a statement released on Wednesday, 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, and 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 effect on energy prices in the recent 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 gone up by 61 percent to N1,200 from N696 it sold in June 2023.
Amidst the constraints NLNG Limited said its 1.3mmt supply is targeted at reducing importation while meeting increasing demand for the product in the country.
It 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 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.”
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