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.
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 vary 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 very small versus the world demand.
LPG Contract Price decreased this month by US$2.50/MT to US$576.00/MT, from US$578.00/MT in November. The said decrease in the Contract Price coupled with the P0.41 centavo appreciation of pesos translates to an estimated decrease in domestic LPG price by about P0.41per kg or P4.51/11-kg cylinder.
International LPG Market Development
- Traders expected higher CP for December in view of the recent tightness of propane supply in Asia due to cargo cancellations, the continuing lack of spot cargoes from the Middle East and improved demand for heating in winter.
- However, butane has been under pressure by abundant supply from the US, where more evenly split cargoes are coming to Asia, while Saudi Aramco has also recently swapped propane cargoes with butane to term lifters for November lifting.
Effective 01 December 2017 most companies effected a P0.40/kg decrease in LPG prices or about P4.40/11-kilogram cylinders. Total adjustment for the year stands now at net increase of P10.49/kg.
As of 01 December 2017, household LPG in Metro Manila ranges to be about P546.00-781.00 per 11-kilogram cylinder.