Peter Uzoho
The Nigeria Liquefied Natural Gas Limited (NLNG) has debunked reports insinuating that a price hike by the company was responsible for the surge in the price of domestic Liquefied Petroleum Gas (LPG), commonly known as cooking gas, in the domestic market.
The company in a statement issued yesterday, by its General Manager, External Relations and Sustainable Development, Andy Odeh, dismissed the said report which had predicted looming scarcity as a consequence as speculative and indicative of a fundamental misunderstanding of Nigeria’s intricate market dynamics.
“The NLNG has noted media reports insinuating that a price hike by the Company is responsible for the surge in the price of domestic Liquefied Petroleum Gas (LPG), commonly known as cooking gas, in the domestic market and predicting that scarcity looms as a consequence.
“NLNG dismisses these media reports as speculative and indicative of a fundamental misunderstanding of Nigeria’s intricate market dynamics,” the company said.
The NLNG explained that the domestic LPG market, like any other, was subject to dynamic market forces and various external factors such as changes in exchange rates, and escalating price benchmarks mirroring crude oil prices.
It further explained that other factors determining the price of LPG included the Panama Canal drought-induced vessel scarcity impacting transport costs especially for imported LPG.
It maintained that the above 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
The NLNG, however, disclosed that it had since the beginning of the year delivered over 380,000 metric tonnes of LPG using its dedicated LPG vessel.
It added that it had been making defining 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.
The NLNG said it currently delivers over 450,000 metric tonnes per annum of Butane, the main product in cooking gas and had embarked on domestic propane supply to further grow the market.
The company said it had committed its entire Butane and Propane production to the domestic market from 2023, adding that despite feed gas challenges, it continues to supply LPG to the domestic market, which accounts for approximately 40 per cent of the total market volume.
The statement read, “Since the beginning of the year, NLNG has delivered over 380,000 metric tonnes of LPG using the Company’s dedicated LPG vessel.
“NLNG has remained committed to delivering domestic LPG to locations as close to the market as possible by diversifying delivery points starting with Lagos in 2023, fostering competition among terminal owners and ultimately reducing consumer supply chain costs. Efforts are ongoing to reach terminals in Warri and Calabar as soon as the challenges limiting safe delivery of volumes to these other locations are cleared.
“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.”
The liquefaction company assured that it had maintained 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 NLNG also informed that it was collaborating with relevant industry stakeholders to achieve this objective and would remain focused on achieving its mission through this avenue among others.
