Saturday, November 08, 2008 Big-time rollback in LPG prices seen
THE prices of liquefied petroleum gas (LPG) would further drop to nearly P300 per 11-kilogram cylinder of LPG with the price cut to be implemented by oil companies soon.
"We are expecting dramatic rollback on LPG prices soon," Energy Secretary Angelo Reyes said during Friday's stakeholder meeting between the Department of Energy (DOE) and industry players.
According to Reyes, the 39 percent change in the contract price in the international market should be reflected immediately at the local market.
From the average US$804 per metric tons (MT) for the month of October, Reyes said LPG prices went down to US$490 per MT for this month. "So, there should be P190 more reduction."
LPG prices now ranged between P550 to P450, based on the price monitoring conducted by the DOE.
Zenaida Monzada, director of DOE's Oil Management Industry Bureau, said based on their computation, a rollback of P8 to P12 per kilogram of LPG should be implemented.
In her presentation, 74 percent of the LPG demand comes from households followed by industries with 20 percent and the rest or six percent from the transport sector.
She also noted that Petron Corporation controls the supply of LPG in the country, having a market share of 37.8 percent. Its rival Pilipinas Shell has a market share of 20 percent and the remaining 40 percent are divided among Liquigaz (42 percent), Pyrce Gas (2.9 percent), Petronas (5.5 percent), and Total Gaz (8.9 percent).
The same presentation indicated that the bulk of the demand comes from the National Capital Region with 34.3 percent followed by Northern Luzon with 33.9 percent, Southern Luzon with 12.3 percent, Visayas with 11.3 percent, and Mindanao with 8.2 percent.
On the other hand, oil companies cannot promise another big-time rollback for LPG after implementing a P4 per kg reduction in LPG prices last weekend.
Jun Golingay of Liquigaz said they cannot ascertain the amount of the rollback this time and when it would be implemented.
For its part, Petron said it is also willing to roll back the price of its LPG.
However, Pete Jaime, an official of Petron, said: "Majority of our supply come from our refinery... we really want to reflect it immediately but we receive importation late October with a high price."
Reyes said the staggered price reduction while possible should not be the case since it is causing price distortion.
"The staggered rollback causes a distortion in the supply chain," he added.
He also ordered oil companies to immediate reflect the price cut. (MSN/Sunnex)
