May 26, 2024

NLNG delivers 380,000MT of cooking gas to offtakers, so-far, in 2023, denies alleged price hike

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Oredola Adeola

 

Nigeria Liquefied Natural Gas Limited (NLNG) has refuted claims that it was responsible for the recent surge in the price of domestic Liquefied Petroleum Gas (cooking gas) in the market, adding that it has been delivering over 380,000 metric tonnes of LPG using its dedicated LPG vessel since the beginning of 2023.

 

 

Andy Odeh, NLNG, General Manager, External Relations and Sustainable Development, in a statement obtained by EnergyDay, claimed that the report was speculative and indicative of a fundamental misunderstanding of Nigeria’s intricate market dynamics.

 

 

Odeh said, “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,” he said.

 

 

Odey further 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.

 

 

He said, “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 the 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, escalating price benchmarks mirroring crude oil prices, and the Panama Canal drought-induced vessel scarcity impacting transport costs, especially for imported LPG.

 

 

“These have had a significant effect on energy prices in recent times and could undoubtedly be some of the reasons for recent price hikes witnessed in the domestic market,” the GM External Relations and Sustainable Development stated.

 

 

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 also noted that it 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 further revealed that it is committing 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 percent of the total market volume.

 

 

The NLNG assured the general public 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. It also promised to continue to collaborate with relevant industry stakeholders to achieve the domestic obligation.