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 an international price benchmark set at the beginning of each month by Saudi Arabia’s state-owned oil company Saudi Aramco.
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 vary 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 very small versus the world demand.
For the month of October, LPG Contract Price has increased by 17.11% or US$46.00 per metric ton to US$578.50/MT, from US$494/MT in September. This would translate to an estimated increase in LPG domestic price of P4.87/kg or P53.60/11 kilograms cylinder.
Reasons for Price Increase
- Bullish market underpinned by a strong US market, amid higher exports.
- Stronger crude oil prices have further strengthened LPG prices.
- Prices of both propane and butane have risen to multi-year highs in the third quarter, largely driven by reduced supply due to a closed arbitrage1 from the US and maintenance across Northwest Europe.
- The CFR Japan propane price rose $23 day on day to $563/mt at the Asian close Thursday, the highest in 34 months, following supply disruptions from the US Gulf Coast following Hurricane Harvey and a tight Middle East spot market due to increased demand from Indian and Chinese buyers.
DOMESTIC OIL PRICES
Effective 01 October 2017, LPG companies implemented a P4.90/kg increase. This price adjustment resulted to a net increase of P10.58/kg since January 2017 to present.
As of 02 October 2017, price monitoring of household LPG in Metro Manila, ranges from P523.90-773.90. Details of the monitored prices in Metro Manila are also posted at DOE website - Price Watch.
For more information, call the Department of Energy:
Pricing: 840-2187
LPG: 840-2130
Fuels: 840-5669
SMS: (0915) 4469421
Email: [email protected]
Website: www.doe.gov.ph
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1 The simultaneous buying and selling of securities, currency, or commodities in different markets or in derivative forms in order to take advantage of differing prices for the same asset.