LPG Contract Price (CP)
LPG Contract Price (CP), commonly called the “Saudi CP” is the primary driver of LPG pricing in the Far East including the Philippines. It is the international price benchmark set at the beginning of each month by Saudi Arabia’s state - owned oil company Saudi Aramco.
Aramco's CPs, which set the price of LPG lifted from the Saudi ports Yanbu, Ras Tanura and Ju'aymah under term supply contracts, are closely watched by the market as they tend to set a base level for LPG pricing for most markets East of Suez.
The DOE refer to the LPG/Saudi CP and forex monthly average changes in determining/monitoring the price adjustments of LPG in the domestic market. Following the timing of the monthly changes in CP, domestic price of LPG also varies every first day of the month and remain constant throughout the whole month.
Like all other petroleum products, the Philippines has no influence over the LPG CP as the country’s domestic requirement is small versus the world demand.
For the month of February 2021, LPG Contract Price has increased by US$55.00/MT to US$ 591.00/MT, from US$ 536.00/MT last month.
International LPG Market Development
- According to Platts news, the higher February CPs were driven by healthy heating demand in North Asia amid a severe winter, which is expected to remain harsh in Japan's northern areas through February.
- This is the eighth consecutive monthly increase in the propane CP, and the seventh rise in a row for butane. Said increases in the CPs were slightly above trader’s expectations of $600/mt for propane and $580/mt for butane.
- This month’s increase in CP is also supported by the robust requirements from Chinese’ Propane Dehydrogenation (PDH) plants which are operating at high rates to capture healthy margins, Platts added.
- While China's retail LPG demand is expected to be under pressure by slowing business activity amid tightening measures to contain the COVID-19 spread, and that household heating needs will be limited as winter season ends in March, LPG demand from the petrochemical sector was reported to stay robust.
- Japan's cold spell has stoked LPG demand in city gas supply for heating, boosting imports until February.
- In India, LPG imports recovered by 8.17% to 1.51 million mt in December after two straight months of declines, as disclosed by its Petroleum Planning and Analysis Cell data released January 26, on improved year-end demand.
- Platts Analytics expects India’s demand for 2021 to touch 28.3 million mt, about 1.2 million higher than 2020, with imports around 17 million mt.
- But the supply-demand equation could change quickly if the Indian government decides to offer free LPG refills to Pradhan Mantri Ujjwala Yojana, or PMUY, beneficiaries in the next fiscal year, Platts Analytics said.
- On supply, Qatar Petroleum had on-time term contract liftings while Saudi Aramco has announced acceptances of term LPG nominations for February loading with cancellations to some term lifters. This was due to Saudi’s move to cut oil production by 1 million b/d in February and March, as decided on the Jan. 5 OPEC+ meeting.
- For US LPG, Asia is reportedly a preferred destination while arbirage window to Europe remains difficult.
Domestic Prices
Oil companies increased the price of LPG effective 01 February 2021 by 2.96-P3.00/kg or an average of about P33.00 per 11-kg cylinder. Auto LPG likewise increased by P1.65-P1.66/liter.
As of 01 February 2021, household LPG in Metro Manila are estimated to range from P633.00 to P937.00 per 11-kilogram cylinder.
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Shown below are the retail prices of 11 Kg. Household LPG |
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| Year | Domestic Price |
Adjustment/Kg. Increase (-Decrease) |
| 2020 | ||
| January | 677.00-829.00 | 7.55 |
| February | 655.00-778.00 | -2.20 |
| March | 611.00-795.00 | -3.90 |
| April | 501.00-770.00 | -9.60 to -10.70 |
| May | 536.00-854.00 | 5.80 |
| June | 536.00-854.00 | -0.28 |
| July | 560.00-780.00 | 0.50 |
| August | 550.00-780.00 | 0.15 |
| September | 560.00-720.00 | 0.15-0.18 |
| October | 528.00-820.00 | 1.00 |
| November | 539.00-850.00 | 3.20 |
| December | 557.00-860.00 | 0.96 |
| 2021 | ||
| January | 600.00-905.00 | 4.16 |
| February | 633.00-937.00 | 2.96 |
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Note: Prices for February are estimates |
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For more information, call the Department of Energy:
Pricing: 840-2187
LPG: 840-2130
Fuels: 840-5669
SMS: (0915) 4469421
Email: oilmonitor@doe.gov.ph
Website: www.doe.gov.ph