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 October 2020, LPG Contract Price has increased by US$ 20.50/MT to US$ 378.50/MT, from US$ 358.00/MT last month.

International LPG Market Development

• The latest increase in Saudi CP came as demand was seen recovering in India and China while North East Asia is facing a colder -than -average winter over December to February, which is expected to boost demand for heating.
• China imported 1.92 million mt of LPG in August, rebounding about 25% from July and up 15% from August 2019. Increased demand from petrochemical as well as residential users was believed to have supported higher LPG imports in August, Platts noted.
• The United States overtook the UAE to become the biggest LPG s upplier to China in January-August at 2.41 million metric tons, significantly higher by 2,443 metric tons over the same period in 2019. China's LPG imports from the US resumed in March as the government gave US LPG import tariff exemptions in the context of signing the first phase of a trade agreement with the US earlier this year.
• The relatively lower import costs for US LPG was also believed to have attracted buying interest for US barrels and have driven up the total US LPG imports over Middle East suppliers.
• India's August LPG imports reportedly jumped 24.7% month on month to 1.241 million mt, following two months of declines. The country’s two state -run oil companies resumed buying spot LPG cargoes from late August for deliveries in September and October as stocks tapered off, and ahead of the peak festive season demand in November. Its year-end requirements are aimed at filing supply gaps after domestic production had dipped earlier in the year due to COVID-19 containment measures and to meet winter demand.
• S&P Global Platts Analytics projects Indian LPG demand to grow to 27.4 million mt this year, about 4% higher versus 2019, a downward revision from its earlier forecast of a 5% increase, while imports are expected to reach about 16.7 million mt next year, from 14.9 million mt in 2019.

Domestic Prices      

Oil companies increased the price of LPG effective 01 October 2020 by P1.00/kg or about P11.00 per 11-kg cylinder. Auto LPG likewise increased by P0.56/liter.

As of 01 October 2020, household LPG in Metro Manila ranges from P571.00-731.00 per 11-kilogram cylinder.

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