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 May 2022, LPG Contract Price has decreased by US$97.00/MT to US$ 857.00 /MT, from US$ 954.00/MT last month.
International LPG Market Development1
- Saudi Aramco set its May propane contract price at $850/mt, down $90/mt from April, while May butane CP was set at $860/mt, down $100/mt from April, the company said April 28.
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The May CPs marked the first dip after three straight monthly increases, S&P Global Commodity Insights data showed. The May 2021 term propane CP was set at $495/mt, while the butane CP at $475/mt.
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US LPG exports in April rose to 995,000 metric ton, about 10% higher than prior estimate of 729,000. Some 503,000 mt of the total export is set for Northwest Europe, while 492,000 mt is headed for the Mediterranean.
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About 572,000 mt LPG originated from the US Gulf Coast, while 419,000 mt from the Marcus Hook refinery in Philadelphia. The remaining 4,000 mt was exported from Chesapeake, Virginia.
- Sources said that large cargoes from the US have helped satisfy demand in the Mediterranean. Tight shipping and previously limited supply pushed buyers to look across the Atlantic, capitalizing on more competitively priced cargoes.
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- While there were reports of minor loading delays by Saudi Aramco for May LPG term acceptances, Platts noted of supply of healthy supply of LPG from Middle East countries.
- On demand, Platts noted Northeast Asia have not been as robust as some months ago, except for the occasional enquiries from South Korean petrochemical makers. Thus, discount for second half of May-delivery of propane versus May CP swap has also deepened in last week of April to $43/mt, from $22/mt the previous session, as the region saw more sellers making offers.
- In other parts of Asia, Indonesia’s LPG imports fell 28.01% on the month and 16.32% on the year to 464,580 mt in February, data from Statistics Indonesia showed April 26, as the country limited purchases in the face of high international prices.
- There has been a recent lull in Indonesia's spot imports though traders are watching for any buying interest as the country celebrates Eid al-Fitr festivities.
- Also, the government has been working on lowering its subsidy burden from LPG, imports of which are growing at 5%-6% annually. The country has long sought to replace LPG with coal-based dimethyl ether (DME) as cooking gas, and in 2020 unveiled a plan to mix DME and LPG for household use to cut LPG consumption.
- Indonesia is the fourth-largest LPG importer, consuming an annual average of 6 million-7 million mt of LPG, about 70% of which is imported via term contracts or spot tenders.
- Meanwhile, Chinese propane dehydrogenation plants were reportedly operating at lower rates as they incurred losses from processing costly propane imports into propylene.
Domestic Prices
Oil companies decreased the price of LPG effective 01 May 2022 by P5.73 kg to P5.75 kg or about P63.03-P63.29 per 11-kg cylinder. Auto LPG likewise decreased by P3.22/liter.
As of 01 May 2022, household LPG in Metro Manila are estimated to range from P851.97 to P1,096.75 per 11-kilogram cylinder.
| Shown below are the retail prices of 11 Kg. Household LPG in Metro Manila from full year of 2021 to May 2022 |
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|---|---|---|
| Year | Domestic Price |
Domestic Price |
| 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 | 7.4 |
| November | 884.00-1085.00 | 2.73-3.10 |
| December | 850.00-1037.00 | (4.37)-(4.75) |
| 2022 | ||
| January | 794.00-1010.00 | -2.55 |
| February | 793.00-1053.00 | 4 |
| March | 880.00-1100.00 | 7.95-8.00 |
| April | 915.00-1160.00 | 3.25-3.40 |
| May | 915.75-1135.75* |
(5.73)-(5.75) |
Note: *Prices for May 2022 are estimates
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
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1 Platts news