Lagos, Nigeria – Nigeria LNG Limited (NLNG) has responded to recent media reports suggesting a connection between the company’s pricing and the surge in domestic Liquefied Petroleum Gas (LPG) prices, commonly known as cooking gas, in the Nigerian market. NLNG has categorically dismissed these claims as speculative and indicative of a fundamental misunderstanding of Nigeria’s intricate market dynamics.
Over the years, NLNG has been pivotal in transforming the nation’s domestic LPG market, leading to a steady growth in domestic LPG market volume from less than 50,000 metric tonnes of imported LPG in 2007 to a remarkable figure of over 1.3 million metric tons of both domestic and imported LPG today. NLNG is known to deliver more than 450,000 metric tonnes of Butane annually, the primary component of cooking gas, and has initiated plans for domestic propane supply to further bolster the market.
Notably, NLNG has made a significant commitment to allocate its entire Butane and Propane production to the domestic market starting in 2023. Despite facing challenges related to feed gas, the company remains steadfast in supplying LPG to the domestic market, contributing to approximately 40% of the total market volume. Since the beginning of this year, NLNG has successfully delivered over 380,000 metric tonnes of LPG utilizing its dedicated LPG vessel.
NLNG is unwavering in its commitment to deliver domestic LPG to locations as close to the market as possible, a goal it aims to achieve by diversifying delivery points, commencing with Lagos in 2023. This strategic move fosters competition among terminal owners and, in the long run, is expected to reduce consumer supply chain costs. Ongoing efforts are also in place to extend delivery to terminals in Warri and Calabar as soon as challenges hindering the safe transportation of volumes to these locations are resolved.
The company acknowledges that the domestic LPG market is subject to dynamic market forces and various external factors. These factors include fluctuations in exchange rates, escalating price benchmarks linked to crude oil prices, and vessel scarcity due to the Panama Canal drought, which has had a notable impact on transport costs, especially for imported LPG. These external factors are deemed to be contributing factors to the recent price hikes observed in the domestic market.
NLNG remains steadfast in its mission to ensure the reliable supply of LPG production to the domestic market at prices that mirror the market’s dynamics. The company is actively collaborating with relevant industry stakeholders to achieve this objective and reaffirms its focus on fulfilling its mission through various avenues.
