LPG use drops by 30% as Filipinos shift to charcoal

Former LPG Marketers Association representative Arnel Ty explains that the LPG price hike is driven by two main factors: higher international contract prices and increased shipping costs

MANILA, Philippines – Former LPG Marketers Association representative Arnel Ty said that LPG consumption in the Philippines has dropped by 30% in the last 40 days as Filipinos shift to charcoal, based on a comparison with data from the same period last year.

Ty said this before the House joint committee on legislative energy action and development on Monday, April 13.

Ty also noted that, based on trends, LPG consumption is significantly lower during the dry season.

He added that about half of Filipino households still use LPG, while the rest rely on indigenous fuels like coal. There’s also a significant difference in the use of LPG in the major islands of the country. In Luzon, 65% of households use LPG, compared to just 25% to 30% in the Visayas, and 15% to 20% in Mindanao.

Ty explained that the price hike is driven by two main factors: higher international contract prices and increased shipping costs.

Companies estimate that LPG prices may increase by P17 to P36 per kilogram this April. With a standard household LPG cylinder weighing 11 kilograms, this translates to an increase of about P187 to P396 per cylinder.

“The shipping cost has become the biggest factor,” Ty said, citing surging crude oil prices and higher risk premiums. He added that many insurers have stopped covering shipments passing through key Middle Eastern routes, forcing suppliers to source LPG from farther locations such as North America and Africa.

This shift has significantly lengthened delivery times, from 13 to 15 days for Middle East shipments to as long as 60 days for cargoes coming from the United States and Canada, further pushing up costs, Ty said.

Despite these pressures, Ty expressed confidence that the country’s LPG supply remains sufficient to meet demand, though he warned that price pressures are likely to persist. – Rappler.com