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 March 2021, LPG Contract Price has increased by US$13.00/MT to US$ 604.00/MT, from US$ 591.00/MT last month.

International LPG Market Development

• Propane and butane CPs for March were both set higher versus last month (February) by US$20 and USS$10 per metric ton, respectively.

• The higher March CPs came as Saudi Aramco announced acceptances of term LPG nominations for March loadings, with trade sources have mixed views on whether there were cancellations or delays and the volumes to be exported.

• Some reports disclosed that there were no cuts or loading delays for March, estimating Saudi exports at about 550,000 to 600,000 metric tons, lower than before Saudi Arabia volunterred to cut crude production, where monthly average exports was estimated at 667,000 metric tons. Saudi Arabia decided to cut oil output by 1 million b/d in both February and March at the Jan. 5 OPEC+ meeting.

• Platts noted that the overall Saudi Aramco's propane supply is tight, as the product is fed into the kingdom's petrochemical plants. But propane's tightness should ease from April, when the kingdom is expected to restore production, if it is confident that crude prices would not fall further.

• Market analysts believe that the expected uptick in demand should be able to accommodate a moderate increase in OPEC+ supply, which the group may decide in the upcoming March 4 OPEC+ meeting.

• US LPG cargoes arriving in late February and early March were anticipated to have likely delays due to disruptions at refineries and terminals in the US Gulf Coast after a polar vortex struck the area, and ice storm severely disrupted the USGC terminal programs.

• Demand in Asia’s biggest LPG consumers have rebounds in January per their respective data disclosures:
  • Japan LP Gas Association data released Feb. 26 showed that the country’s LPG stocks rose 3.22% month on month to 1.281 million mt in January, after three straight months of declines, as imports surged during a severe winter that pushed up demand. The country’s total LPG demand rose 2.75% on the month to 1.309 million mt, extending beyond six-month highs amid the lingering cold spell in January.
  • South Korea’s demand recovered by 1.57% on the month to 11.155 million barrels, after dipping almost 8% on the month in December. The rebound in on-month demand in January came as Taekwang Industrial's 300,000 mt/year propane dehydrogenation plant at Ulsan was scheduled to have resumed operations after 26-days of maintenance that started Nov. 27.
  • India's LPG consumption in January dropped 1.5% month on month to 2.492 million metric tons, as the country slowly returns to normalcy with the expansion of the COVID-19 immunization campaign. However, demand was higher by nearly 8% year on year according to Platts.

Domestic Prices      

Oil companies increased the price of LPG effective 01 March 2021 by P0.73 to P0.82/kg or about P8.03-P9.02 per 11-kg cylinder. Auto LPG likewise increased by P0.40-P0.46/liter.

As of 01 March 2021, household LPG in Metro Manila are estimated to range from P643.00 to P946.00 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: [email protected]
Website: www.doe.gov.ph