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 December 2021, LPG Contract Price has decreased by US$78.50/MT to US$ 763.50 /MT, from US$ 842.00/MT last month.
International LPG Market Development
- Saudi Aramco has set December propane term contract price at $795 per metric ton, down $75 from November, and butane CP at $750 per metric ton, $80 per metric ton lower than November. This was the first decrease after six straight monthly rises in CPs;
- The lower December CP reflected more subdued market sentiment after Asian prices had jumped to around seven-year highs, dampening end users' appetite for costly domestic fuel and feedstock. It is also supported by healthy supplies from the Middle East and US;
- Saudi Aramco announced December-loading of term LPG cargo nominations without cuts, delays and advancements, in line with lifters' nominations. Abu Dhabi National Oil Co. (ADNOC) and Qatar Petroleum (QP) had earlier announced acceptances of December-loading nominations without cuts or delays as well;
- Overall, Platts noted that supply from the Middle East, including ample flows from Iran, is healthy enough to meet demand from North Asia during winter and from Chinese propane dehydrogenation plants that have raised production rates;
- The steady supplies from the Middle East and US to Asia, along with recent spot offers, halted the propane price ascent beyond seven-year highs at $916.50 in October, Platts said.
- On demand, Japan total LPG imports recovered by 13.46% from previous month to 826,000 metric ton in October. Propane imports rose 25% on the month to 763,000 metric tons, while butane imports slid 46.15% on the month to 63,000 metric tons;
- South Korea LPG imports increased as well by 10% in October as demand increased by about 5% during the month. The month-on-month rebound in LPG consumption could be due to a higher vaccination rate, as 80% of the adult South Korean population was fully vaccinated in October;
- The costlier LPG compared with naphtha in recent months has also turned petrochemical makers away from propane and butane as an alternate cracker feedstock. Currently, naphtha remains a more economical feedstock than LPG.
Oil companies decreased the price of LPG effective 01 December 2021 by P4.37 to P4.75/kg or about P48.07 to 52.25 per 11-kg cylinder. Auto LPG likewise decreased by P2.65 to P2.66/liter.
As of 01 December 2021, household LPG in Metro Manila are estimated to range from P835.93 to P1,032.75 per 11-kilogram cylinder.
Shown below are the retail prices of 11 Kg. Household LPG
|April||501.00-770.00||-9.60 to -10.70|
|April||605.00-784.00||(3.27) - (3.30)|
|May||639.00-900.00||(3.15) - (3.20)|
Note: *Prices for December are estimates