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 remained this month at December 2017 level of US$576.00/MT.
International LPG Market Development
- Saudi Aramco set its January 2018 Contract Price unchanged from the December CPs;
- Platts noted that the January CP is in line with trader expectations;
- Aramco's CPs, which set the price of LPG lifted from the Saudi ports of 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 of East of Suez.
While there is no movement in the international reference price or LPG Contract Price, the appreciation of peso against the US dollar brought LPG domestic prices slightly lower this month.
Some companies implemented a price rollback of P0.37/kg (VAT inclusive) or P4.07 per 11-kg cylinder while others have not notified yet of their price movement. The said adjustment does not reflect yet the P1.12/kg impact of excise tax per R.A. 10963.
As of 11 January 2018, household LPG in Metro Manila ranges from P550.00-777.30 per 11-kilogram cylinder.