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 etermining/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 2022, LPG Contract Price has decreased by US$44.00/MT to US$ 719.00/MT, from US$ 763.50/MT last month.
International LPG Market Development
- Saudi Aramco set its January propane contract price at $740/mt, down $55/mt from the December CP, and the butane CP at $710/mt, $40/mt below December. It is the second consecutive decrease after six straight monthly rises in CPs.
- Platts noted of lower demand from some countries in Asia and on expectation of dehydrogenation plants maintenance in China in January as the reasons for the lower LPG CP for the month:
o Demand from India decreased as buying interest remained low due to an overhang of supplies following the annual Diwali celebrations, when demand typically spikes.
o Demand from China are also expected to be lower as more propane dehydrogenation plants shut down for maintenance in January compared with December.
o LPG demand for heating is also expected to be low in South Korea as the country is expected to enter an unusually warm winter.
o Winter demand in Japan was also heard to be low despite the recent cold snap as the country maintained robust inventories from advanced purchases.
- On supply, there are reports that some end-users have expressed worries if the US’ growing LPG supply will be sufficient to meet the rising demand in Asia even as Europe and Latin America increasingly compete for US cargoes. Middle East flow of supply is seen to be stable to slightly higher, and Iranian shipments could fill the Chinese demand.
- Platts noted that Asia is bracing for consistently costlier LPG versus naphtha, which may be entrenched as the major feedstock for steam crackers in 2022, extending the trend seen for about nine months in 2021, as propane demand rises further on growth in China's propane dehydrogenation sector.
Domestic Prices
Oil companies decreased the price of LPG effective 01 January 2022 by P2.55kg or about P28.05 per 11-kg cylinder. Auto LPG likewise decreased by P1.40 to P1.43/liter.
As of 01 January 2022, household LPG in Metro Manila are estimated to range from P822.00 to P1,009.00 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) |
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| 2021 | |||
| January | 600.00-905.00 | 4.15-4.20 | |
| February | 634.00-937.00 | 2.95-3.00 | |
| March | 643.00-946.00 | 0.73-0.82 | |
| April | 605.00-784.00 | (3.27)-(3.30) | |
| May | 639.00-900.00 | (3.15)-(3.20) | |
| June | 600.00-920.00 | 2.18-2.44 | |
| July | 655.00-960.00 | 5.19-5.20 | |
| August | 710.00-992.00 | 3.27-3.35 | |
| September | 780.00-995.00 | 0.64-0.65 | |
| October | 832.00-1040.00 | 7.40 | |
| November | 884.00-1085.00 | 2.73-3.10 | |
| December | 850.00-1037.00 | (4.37)-(4.75) | |
| 2022 | |||
| January | 821.95-1008.95* | -2.55 | |
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Note: *Prices for January 2022 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