Rollback on LPG prices seen in February

Published January 29, 2020, 12:00 AM

by manilabulletin_admin

By Myrna Velasco 

The price of liquefied petroleum gas (LPG) is headed for a significant rollback next month, based on initial estimates of industry players.

Some LPG companies have estimated price cuts within the range of P4.50 to P5.50 per kilogram; while others place it at a wider variance of P4.00 to P6.00 per kilogram.


With the preliminary calculations, LPG consumers can expect a prospective cost reduction of P44, P55, or P66 for the 11-kilogram cylinder, which is the typical size being purchased by households.

The pick-up price of LPG in various retail outlets ranges from P677.05 to P828.69 for the 11-kilogram tank.

Cost movements for this cooking commodity are expected to move by February 1 upon the LPG companies’ pricing adjustment advisory to the Department of Energy.

For some of the LPG industry players though, the full cost reduction impact may not be felt by end-users because they will still be enforcing the higher excise tax for the product, which is at P1.12 per kilogram inclusive of value added tax.

The DOE said it has been strictly monitoring the implementation of the adjusted excise taxes, including in the LPG sector. Based on the latest report of the department, only four of the country’s 297 LPG refilling plants had implemented the higher excise taxes.

On the monthly movement of LPG prices in the Philippines, the cost benchmark being applied is that of Saudi Aramco, an oil kingdom of the Middle East, which is often the source of supply being traded in Asian markets.

The Saudi Aramco LPG contract price is set at the beginning of each month, based on the price of LPG lifted from the Saudi ports of Yanbu, Ras Tanura and Ju’aymah which are typically under term supply contracts.

The energy department emphasized that it has been monitoring LPG price movements in the domestic market based on the Saudi contract prices and the foreign exchange monthly average fluctuations

“Following the timing of the monthly changes in contract price, domestic price of LPG also varies every first day of the month and remains constant throughout the whole month,” the DOE noted.