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 July 2022, LPG Contract Price has decreased by US$25.00/MT to US$ 725.00/MT, from US$ 750.00/MT last month.
International LPG Market Development
- Saudi Aramco set its July propane and butane term contract price at $725/mt, both down by $25 per metric ton from June.
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The July propane and butane CPs were set around the higher end of term lifters' recommendations.
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The July CPs marked the third-straight fall, following three monthly increases in a row, S&P Global Commodity Insights noted, as Asia is amply supplied with Middle Eastern and US cargoes, while demand is mainly from China's propane dehydrogenation plants and is tepid elsewhere.
o Demand from India and Indonesia, among the world’s largest LPG consumers, reportedly remain in a lull.
o China's 17 propane dehydrogenation plants operated at an average 75% capacity in May. The 17 plants have a combined propylene production capacity of 10.87 million metric ton per year, requires up to 13.04 million mt/year of propane feedstock at full capacity.
o China’s higher butane imports are "partly due to seasonality and good margins for Methyl tert-Butyl Ether (MTBE)2 as well, in addition to demand from petrochemical plants.
- Meanwhile, demand from Asia's petrochemical sector for LPG as alternate cracker feedstock has also not resurfaced in recent months, despite steep discounts of LPG to naphtha.
- On supply, US LPG loading in June reportedly around 2.9 mil mt, up 21% on month as arbitrage opens, as disclosed in Platts report:
o US LPG cargoes loading in June for delivery to Asia in July are estimated at 2.9 million mt, up from 2.4 million mt loading in April, while July-loading cargoes for August arrival are projected at around 2.7 million as regional price strength supported by Chinese petrochemical-sector demand opens Western arbitrage;
o The US cargoes together with healthy Middle Eastern flows keeps Asia well supplied. Supply flows is also seen helping the LPG freight market recover from a recent downtrend.
- .Iranian cargoes are also helping meet butane demand. Iran exported 859,000 mt of mixed LPG for May loading, highest monthly volume since sanctions were imposed in 2014 and 2018.
Domestic Prices
Oil companies decreased the price of LPG effective 01 July 2022 by P0.35 kg to P0.40 kg or about P3.96-P4.40 per 11-kg cylinder. Auto LPG likewise decreased by P0.22/liter.
As of 01 July 2022, household LPG in Metro Manila are estimated to range from P836.04 to P1,022.60 per 11-kilogram cylinder.
| Shown below are the retail prices of 11 Kg. Household LPG in Metro Manila from full year of 2021 to July 2022 | ||
|---|---|---|
| Year | Domestic | Adjustment/Kg. |
| Price | Increase (-Decrease) | |
| 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 | 885.00-1113.00 | (5.73)-(5.75) |
| June | 840.00-1027.00 | (5.80)-(5.91) |
| July* | 836.04-1022.60 | (0.35)-(0.40) |
| Note: *Prices for July 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
2 Methyl tert-Butyl Ether (MTBE) is a man-made chemical that raises the oxygen content of gasoline, allowing it to burn more cleanly in vehicles.