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 January 2021, LPG Contract Price has increased by US$79.00/MT to US$ 536.00/MT, from US$ 457.00/MT last month, December 2020.
International LPG Market Development
- Saudi Aramco’s higher January CPs were reportedly driven by healthy heating demand in North Asia amid a harsh winter and recovering requirements from Propane Dehydrogenation (PDH)1 plants.
- According to Platts report, Asia's LPG demand in 2021 will again be led by China, driven by additional processing capacity at three new PDH plants and recovering post-COVID economic growth, while South Korean domestic sales are set to sustain this year's uptrend to meet petrochemical requirements for medical goods production.
- While developments in China and South Korea are seen to keep LPG prices supported, muted Indian demand early in the year could moderate price increase.
- Platts Analytics projects Indian 2021 LPG demand to reach 28.3 million mt, some 1.2 million mt higher year on year, with imports around 17 million mt.
- The supply-demand equation could change quickly if India's government decides to offer free-LPG refills to Pradhan Mantri Ujjwala Yojana2 beneficiaries in the this fiscal year, Platt Analytics said.
- Southeast Asia's dependence on import is estimated to increase further due to COVID-19, while Asia's deficit is likely to be 69 million to 70 million mt for 2021, according to Platt Analytics.
- On supply, healthy shipments of propane are expected from t he US, with 2.9 million metric tons estimated to arrive in January to Asia. Yet estimated US propane exports in 2021 are expected to be lower by 8% from 2020 estimates. Tightening forecast suggests a slight contraction in average annual output in 2021 before recovering to pre-pandemic levels by mid-2022. Platts further noted that:
- The US' normal butane exports are forecast to fall 44% from 2020 estimates.
- With global propane demand rising faster than butane, US exports are forecast to return to pre-pandemic levels by 2023 and average 316,000 b/d by 2025.
- Middle East supply will depend on the OPEC+ alliance's decision at its Jan. 4 meeting, for which it is expected to stay cautious as a new coronavirus strain may weigh on global oil demand outlook early next year.
Domestic Prices
Oil companies increased the price of LPG effective 01 January 2021 by P4.15-P4.18/kg or an average of about P45.79 per 11-kg cylinder. Auto LPG likewise increased by P2.33-P2.35/liter.
As of 01 January 2021, household LPG in Metro Manila are estimated to range from P603.00 to P906.00 per 11-kilogram cylinder.
Upon effectivity of the adjustments, household LPG in Metro Manila are estimated to range from P550.00-861.00 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 | 603.00-906.00 | 4.16 |
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Note: Prices for January 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: [email protected]
Website: www.doe.gov.ph
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1 PDH is a process step in the production of propylene from propane. PDH is vital to the petrochemical industry;
propylene is the second most important starting product in the petrochemical industry after ethylene.
2 It is a scheme of the Ministry of Petroleum and Natural Gas for providing LPG connection to women from below
poverty line households.