Philippines seals deals for 66M kilos of LPG
The Philippines is expected to get a supply boost for liquefied petroleum gas (LPG), with fresh commitments from the United States, Canada and Mexico for the delivery of a total of 66 million kilograms of LPG within the second quarter.
Arnel Ty, founder of the LPG Marketers Association Inc. and president of Republic Gas Corp., said industry players had a meeting with the Department of Energy (DOE) earlier this week.
They were informed about the government-to-government procurement to increase the LPG stockpile.
The Marcos administration is seen spending P2 billion to P2.5 billion for the acquisition of said supply. It will be enough for 20 to 30 days.
The LPG industry’s inventory at present is enough for 35 to 40 days, Ty told reporters on Wednesday.
Like the two million barrels of diesel that the government also bought, the LPG supply will be sold to retailers at cost.
Ty said that once the deals are finalized, the LPG shipments might arrive by mid-May to early June.
According to Ty, the government’s intervention was necessary since securing fresh supplies is now being done under through bidding, which is “much more expensive.”
He said government-to-government procurement is an additional guarantee to boost inventory toward the government’s target of having supplies that are good for a total of 60 days.
But since the government has no storage facilities, the DOE sought to tap the private sector’s network.
“We are being asked to let them use the storage facility; if we don’t agree, they will take it over. They have the right to do so under the declaration,” Ty added.
He was referring to the state of national energy emergency that President Marcos declared amid the soaring fuel prices due to the Middle East war.
On top of government efforts to obtain new contracts, Ty said local suppliers are also continuing their talks with “smaller-scale” producers.
Meanwhile, Filipino households, restaurants and food vendors will have to shell out more money to buy LPG.
Oil firms have implemented hikes this month of as much as P403 per 11-kilogram (kg) cylinder.
Seaoil Philippines Inc., through Seagas, said on Wednesday that its LPG price has increased by P36.63 per kg.
Solane hiked its LPG price by P17 per kg and Petron by P20 per kg.
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