Shell, Caltex roll LPG prices back by P11

Proof that competitive forces are at work in the country’s deregulated oil industry is the announcement of Pilipinas Shell Petroleum Corp. that it will roll back the price of its liquefied petroleum gas (LPG) by P1 per kilo starting today.

Last June 15, Shell increased the price of its LPG by P1.70 per kilogram or P18.70 per 11-kg cylinder. This came even as industry leader Petron Corp., which accounts for 25 percent of the LPG market in the country, has not increased its LPG prices.

But Shell external affairs general manager Roberto Kanapi pointed out that the move to roll back LPG prices was just to keep local prices consistent with international LPG prices.

"Following the drop in LPG international contract prices for July 1, Shell is pleased to advise a rollback in Shellane LPG prices by P1 per kg. effective 12:01 a.m. today," he said.

Kanapi disclosed that contract price for June was $350 per metric ton compared to July’s $329.

Shell’s suggested retail price for its LPG in Metro Manila will now be P350 to P360 per 11-kg cylinder.

As of press time, Petron said it is still assessing the market. "There is no advice yet on our move," Petron said.

Two other oil firms that raised their prices last June 15, Caltex Philippines Inc. and Total Philippines Inc., have yet to announce their decision if they will follow Shell’s move.

The LPG market has been growing steadily since the deregulation of the downstream oil market in 1998. The small independent players have captured more than 30 percent of the market, particularly Total, Pryce and Liquigaz.

The LPG requirement is about 10 percent of the country’s oil demand with an annual average growth of 7.5 percent.