Gas price hike due to supply constraints, global market pressures— Marketers

The Nigerian Association of Liquefied Petroleum Gas Marketers (NALPGAM) has said that the recent rise in Liquefied Petroleum Gas (LPG) prices is driven by supply constraints and global market pressures.

Edu Inyang, NALPGAM president, in Lagos on Sunday, attributed the increase to higher depot prices caused by reduced local supply and rising international benchmarks.

He said lower volumes from the Dangote Refinery had affected domestic supply, making it more difficult for marketers to access the product.

“Obtaining the product has become increasingly difficult, with allocations no longer as frequent as before,” he said.

According to him, some off-takers are unable to secure supplies for extended periods, while those with access are responding to prevailing demand conditions.

He added that supplies from the Nigeria LNG Ltd. were also coming at higher costs, further pushing up depot prices nationwide.

Mr Inyang linked the trend to developments in the global energy market, noting that international price movements continued to influence domestic pricing.

“Nigeria is not insulated from global energy shocks. Developments in the international market inevitably affect local LPG prices,” he said.

He stated that reliance on imported inputs and foreign exchange dynamics also contributed to rising costs.

The NALPGAM president noted that depot operators factor in landing and operational costs, which are reflected in retail prices.

“Private depot operators cannot sell below their landing and operational costs, and this ultimately impacts the final price to consumers,” he said.

He, however, expressed optimism that increased investment in gas infrastructure would improve supply.

“We have experienced similar cycles before. With the right investments, supply will improve, and prices will stabilise,” he said.

Mr Inyang called for the development of more gas processing plants and greater private sector participation to boost domestic production.

He added that improved output from existing and upcoming gas projects would help stabilise the market and moderate prices.