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.

Aramco's CPs, which set the price of LPG lifted from the Saudi ports of 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 through 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 September 2020, LPG Contract Price has increased by US$ 7.00/MT to US$ 358.00/MT, from US$ 351.00/MT last month.

International LPG Market Development

• Saudi Aramco has set the September propane term contract price at $365/mt, unchanged from August, and the butane at $355/mt, up $10/mt from August at $345/mt. The CPs were in the lower end of traders' expectations. Traders had expected a wide range for the September CPs, with most expecting propane to be around $5-$10/mt above the September CP swaps, and butane about $8-10/mt below propane.
• On Aug. 27, traders gave a wide range of expectations for the Saudi Aramco September propane and butane CPs of around or above the August CPs, $365/mt for propane and $345 for butane, on concerns about the impact of Hurricane Laura on oil, gas and refining production in the USGC.
• However, Asia's LPG market was more at ease on 28 August after worries over production disruptions at NGLs facilities in Mont Belvieu, Texas dissipated as Hurricane Laura followed an eastern track, sparing the region torrential rain and catastrophic wind. Hurricane Laura made landfall at the border of Texas and Louisiana late Aug. 27, forcing several LPG export terminals and offshore production platforms to shut down operations.
• US LPG exports to Europe and the Mediterranean were lower in August as demand fell on the back of full storage and increasing market length; thus, most US volumes are expected to find a home in East Asia rather than Europe.
• US remains the top LPG supplier to China. China imported 1.54 million mt of LPG in July, down 23% year on year and 7.6% lower on the month. Increased domestic output, high inventory, together with weak seasonal demand were believed to have discouraged imports in July, Platts noted.

Domestic Prices      

Oil companies increased the price of LPG effective 01 September 2020 by P0.15-P0.18/kg or about P1.65-/P1.98 per 11-kg cylinder. Auto LPG likewise increased by P0.10/liter.
 
As of 01 September 2020, household LPG in Metro Manila ranges from P552.00-782.00 per 11-kilogram cylinder.

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