LPG Monitor as of May 2021

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 May 2021, LPG Contract Price has decreased by US$58.00/MT to US$ 481.00/MT, from US$ 539.00/MT last month.

International LPG Market Development

  • Saudi Aramco set its May propane term contract price (CP) at $495/mt, down $65/mt from April, while the butane CP was set at $475/mt, down $55/mt from April. The Philippine LPG is a combination of 30% propane and 70% butane.
  • The May propane CP is the second consecutive decline after nine-straight months of increases, and eight consecutive rises for butane. The latest drop in prices were due to healthy supply from the Middle East. While there are some delays in UAE May term nominations, Saudi Arabia and Qatar were reportedly accepting May-loading term cargo nominations with no cuts or delays.
    • Saudi Arabia restores crude production to meet OPEC plus commitments.
    • Also, refineries in Vietnam have recently offered pressurized LPG cargoes to international buyers via tenders to clear surplus amid tepid domestic take-up.

  • On demand, India is projected to surpass China in residential/commercial LPG demand, with consumption expected to grow to near 31 million metric tons by end-2025, despite demand-side barriers and the possibility of further subsidy reduction, S&P Global Platts Analytics noted.

  • In 2019, demand of India grew 7.25% to 25.84 million mt and continues to grow. The robust demand growth came on the back of the social welfare program Pradhan Mantri Ujjwala Yojana, PMUY, which India launched May 2016 to provide 80 million underprivileged households with clean cooking fuel by replacing wood or biomass-fired stoves with LPG burner stoves.

  • China, the world's largest LPG consumer, saw residential/commercial demand almost doubling to 33.22 million mt in 2017 from 17.1 million mt in 2012. But residential/commercial market growth has started waning, as demand reportedly flattened in the wake of China's "battle of blue skies" program, which bolstered natural gas infrastruc ture and supplied natural gas to inland markets.
    • Platts’ report stated that China keeps on expanding natural gas pipeline infrastructure and boost natural gas share in the energy mix, resulting in a steady displacement of LPG by natural gas. LPG demand in the residential/commercial sector is projected to fall to near 29 million mt by 2025.
  • In the Philippines, Platts relayed reports that COVID-19 is affecting LPG sale on the back of the longest quarantine that diminished consumption of industries and commercial establishments.
    • Supported by the weak demand, domestic market is reportedly oversupplied, even before JG Summit, the local player with largest storage comes into the picture. Given its large capacity, the entry and full operation of JG Summit is projected by analysts to add even more downward pressure to domestic LPG prices.

Domestic Prices      

Oil companies decreased the price of LPG effective 01 May 2021 by P3.20/kg or about P35.20 per 11-kg cylinder. Auto LPG likewise decreased by P1.80/liter.

As of 01 May 2021, household LPG in Metro Manila are estimated to range from P570.00 to P749.00 per 11-kilogram cylinder.

Shown below are the retail prices of 11 Kg. Household LPG
in Metro Manila from full year of 2020 to May 2021
Year Domestic
Price		 Adjustment/Kg.
Increase (-Decrease)
2020  
January 677.00-829.00 7.55
February 655.00-778.00 -2.20
March 611.00-795.00 -3.90
April 501.00-770.00 -9.60 to -10.70
May 536.00-854.00 5.80
June 536.00-854.00 -0.28
July 560.00-780.00 0.50
August 550.00-780.00 0.15
September 560.00-720.00 0.15-0.18
October 528.00-820.00 1.00
November 539.00-850.00 3.20
December 557.00-860.00 0.96
2021    
January 600.00-905.00 4.16
February 634.00-937.00 2.95-3.00
March 640.00-946.00 0.73-0.82
April 605.00-784.00 -3.30
May 570.00-749.00 -3.20

Note: Prices for May are estimates

For more information, call the Department of Energy:
Pricing: 840-2187
LPG: 840-2130
Fuels: 840-5669
SMS: (0915) 4469421
Email: [email protected]
Website: www.doe.gov.ph

 

 

LPG Monitor as of April 2021

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 April 2021, LPG Contract Price has decreased by US$65.00/MT to US$ 539.00/MT, from US$ 604.00/MT last month.

International LPG Market Development

  • The April propane CP is the first decline after nine-straight months of increases, and eight consecutive rises for butane, reflecting the pressure on the Middle East market amid healthy supply from Qatar, Kuwait and Abu Dhabi National Oil Co., offsetting shortfalls from Saudi Arabia in line with the kingdom's crude output cuts over February-April to meet OPEC+ commitments.
    • The Saudi propane supply has also tightened due to domestic petrochemical demand.
  • Only a few Very Large Gas Carriers (VLGC) pass through the Suez Canal carrying LPG from North Africa, North West Europe and the US to Asia . A number of Carriers are relying instead on the Panama Canal, Persian Gulf and Cape of Good Hope to transit cargoes. Thus, according to Platts sources, the impact on LPG of the stranded container ship blocking the waterway is limited.
    • While China have LPG imports from the US it was not known how much of it transit the Suez Canal. However, the shipping and trade sources also did not expect the Suez blockage to have too much impact on the already rebounding VLGC market, unless the situation escalates, Platts noted.
    • VLGC rates on the key Middle East-Japan route have been climbing since hitting a nine-month lows at $27/mt on March 8 to stand near $40/mt March 26, driven by the resumption of US loadings after winter disruptions and busier Middle East-India activity countering a number of trader relets. Thus, VLGC rates was already on uptrend prior to Suez incident, Platts noted.
  • On demand, India's LPG imports rose almost 12% to 1.527 million metric tons in February, the highest since September 2020 when inflows hit 1.643 million mt. The rise in imports came amid India bracing new measures to control the COVID-19 pandemic as the country saw a fresh surge in cases and deaths in March, the first anniversary of the start of the nationwide lockdown.
  • Meanwhile data from South Korea showed a dropped in demand and imports in February despite the cold weather in the country, while the harsh North Asian winter had driven up cost and freight (CFR) North Asian propane prices.
  • Overall Platts assessment was that Asia's LPG market has persisted in a steep backwardation1 in February, reflecting the strong prompt market during winter, a structure that normally prompts North Asian buyers to limit, or defer imports.

Domestic Prices      

Oil companies decreased the price of LPG effective 01 April 2021 by P3.27 to P3.30/kg or about P35.97 to P36.30 per 11-kg cylinder. Auto LPG likewise decreased by P1.85/liter.

As of 01 April 2021, household LPG in Metro Manila are estimated to range from P604.00 to P909.00 per 11-kilogram cylinder.

Shown below are the retail prices of 11 Kg. Household LPG
in Metro Manila from full year of 2020 to April 2021
Year Domestic
Price		 Adjustment/Kg.
Increase (-Decrease)
2020  
January 677.00-829.00 7.55
February 655.00-778.00 -2.20
March 611.00-795.00 -3.90
April 501.00-770.00 -9.60 to -10.70
May 536.00-854.00 5.80
June 536.00-854.00 -0.28
July 560.00-780.00 0.50
August 550.00-780.00 0.15
September 560.00-720.00 0.15-0.18
October 528.00-820.00 1.00
November 539.00-850.00 3.20
December 557.00-860.00 0.96
2021    
January 600.00-905.00 4.16
February 634.00-937.00 2.95-3.00
March 640.00-946.00 0.73-0.82
April 604.00-909.00 -3.30

Note: Prices for April are estimates

For more information, call the Department of Energy:
Pricing: 840-2187
LPG: 840-2130
Fuels: 840-5669
SMS: (0915) 4469421
Email: [email protected]
Website: www.doe.gov.ph

-------

1 one where there is a very steep premium for commodity available for immediate delivery—often indicates a perception of a current shortage in the underlying commodity.

 

Pages