Uche Cecil Izuora
Despite Federal Government’s intervention to ensure supply stability of Liquified Petroleum Gas (LP) consumers of the cooking gas are yet to see a sharp decrease in prices.
Although supply has improved significantly following the emergency stakeholders’ meeting convened in Abuja by the Minister of State for Petroleum Resources (Gas), Ekperikpe Ekpo, on June 22, consumers across the country are still paying between N1,300 and N1,650 per kilogramme for cooking gas.
But while domestic stability is being restored traffic through the Strait of Hormuz came to a near standstill after the US struck Iran for a second straight day, leaving a fragile truce between the two sides looking increasingly shaky.
Renewed hostilities, which caused oil and fuel prices to jump in recent days, have raised doubts about traffic through the vital energy conduit normalizing. A small number of vessels signaled their transit along the route controlled by Iran on Thursday, while the U.S.-supported Omani corridor was empty of observable traffic, ship-tracking data showed.
As the war has gone on, it’s become increasingly evident that some oil tankers have been sailing through Hormuz with their transponders off to lower the risk of attack by Iranian forces. With three attacks on big oil and gas tankers this week, it’s very possible that the practice has resumed. Information about those dark transits takes several days to emerge.
Among larger vessels, only a U.S.-sanctioned supertanker heading out of the Persian Gulf was seen in the strait Thursday, alongside an Iranian-flagged container ship. The same day, an Indian-flagged supertanker and a UAE-based bulk carrier emerged in the Gulf of Oman after turning off their transponders inside the Persian Gulf.
A liquefied natural gas carrier also entered the Persian Gulf without broadcasting its location signal until it was in, according to vessel-tracking data compiled by Bloomberg.
Traffic ground to a near halt in the Strait of Hormuz on Thursday. Ship clusters can be seen forming, a sign of electronic interference in navigation systems.
The Joint Maritime Information Center, a naval liaison to shipping, said traffic on Tuesday and Wednesday was at “reduced levels,” even as U.S.-assisted commercial transits proceeded without interruption.
The traffic slowdown comes after Iranian attacks on vessels prompted U.S. strikes, while President Donald Trump declared that the ceasefire with Iran was over. Some 21 commodity carriers crossed the strait in either direction on Wednesday, fresh data from Kpler show, making it one of the thinnest traffic flows since the interim peace deal in mid-June.
It’s a stark shift from recent daily activity in the strait. In the three weeks since the U.S. and Iran agreed to an interim deal to reopen Hormuz, average daily transits of commodity vessels was at 34, with a peak of 59 on June 24, Kpler data show. That compares with a wartime daily count of less than 20 on most days.
London marine insurers also reported seeing fewer inquiries for journeys to transit the strait and some said the cost of cover had risen, in a sign of growing caution from shipowners as the U.S. and Iran exchange attacks.
While LNG tanker exits through the strait remained at a standstill, one empty vessel has entered the Persian Gulf while another is approaching Hormuz from the Gulf of Oman.
Away from the Strait of Hormuz, at least nine empty supertankers with capacity exceeding 18 million barrels have been spotted anchored off Pakistan, according to vessel-tracking data compiled by Bloomberg. All were previously involved in ship-to-ship transfers linked to Russian, Iranian or Venezuelan oil, and at least six have been sanctioned by the U.S.
There were also signs that sporadic electronic interference was back, with vessels to the southeast of Limah in Oman in the Gulf of Oman appearing to travel at unusually fast speeds of at least 30 knots early on Thursday. That could point to countries activating defense systems aimed at obstructing hostile forces’ drones from attacking their infrastructure, which can affect ships’ transponder signals. Electronic interference may also affect ship-tracking data
In Nigeria, before the scarcity and price surge that started in May, a kilogramme of cooking gas was selling for below N1,000. It rose to as high as N2,500 in some locations in June before the minister’s intervention.
Though, retail prices had begun to ease after weeks of sharp increases, with cooking gas selling for between N1,100 and N1,350 per kilogramme in Lagos, Ibadan and Abeokuta; N1,150 and N1,400/kg in Benin City, Port Harcourt and Warri; N1,200 and N1,450/kg in Onitsha and Enugu; N1,250 and N1,500/kg in Abuja; while consumers in Kano and Kaduna paid between N1,300 and N1,550/kg. Maiduguri and parts of the North-East recorded the highest prices at between N1,350 and N1,650/kg, according to reports.
Marketers said the government’s intervention had succeeded in restoring stability to the market but had yet to make cooking gas affordable for millions of households.
Two weeks after the emergency stakeholders’ meeting convened in Abuja by the Minister of State for Petroleum Resources (Gas), Ekperikpe Ekpo, Nigeria’s LPG market has shown early signs of stabilisation, but the crisis is far from over and now exacerbated by renewed Iran-U.S fight.
The meeting succeeded in calming market panic and improving supply, yet it has not translated into a significant reduction in retail cooking gas prices for consumers,” he said.
The emergency meeting was convened after terminal prices surged sharply, pushing retail prices to between N1,800 and N2,500 per kilogramme in many cities as marketers battled severe supply shortages, rising depot and landing costs, higher logistics expenses, panic buying and speculative stocking.
The situation threatened the Federal Government’s Decade of Gas agenda, as many households abandoned cooking gas for firewood and charcoal. Inyang said one of the major gains from the Abuja meeting was the improvement in product availability across the country.