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.
For November, LPG Contract Price remained at US$578.00/MT, the same with LPG CP in October. However, peso depreciation against the US dollar may still drive domestic prices higher this month, estimated at about P0.26/kg. This would translate to an estimated increase of nearly P3.00 per 11-kilogram cylinder.
International LPG Market Development
- US LPG cargo lifting program to Asia for November is expected to remain the same as October or even more on positive arbitrage economics;
- Asia is expected to be well supplied until the end of 2017 to meet winter heating demand in Japan, China and South Korea;
- Asia is also getting its usual two monthly cargoes from Nigeria in November, which together with the ample supply from the US could help meet the rising demand and fill the spot supply shortfall from major Middle Eastern producers.
Effective 01 November 2017, LPG companies implemented a P0.30/kg increase or P3.30/11-kilogram cylinders. Total adjustment for the year is now at net increase of P10.88/kg.
Following said adjustment, price monitoring of household LPG in Metro Manila ranges from P538.00-778.00 per 11-kilogram cylinder. Details of the monitored prices in Metro Manila are posted at the Price Watch of the DOE website.