Reyes warns LPG traders on 'alarmist' price hikes

MANILA, Philippines - Energy Secretary Angelo Reyes yesterday urged liquefied petroleum gas (LPG) refillers to stop making premature price announcements, which cause panic among consumers.

“I enjoin everybody to desist from making premature announcements that will create panic in the market as what happened in the last week of August,” Reyes said during an industry stakeholders’ meeting.

Reyes assured the public that there was no shortage of LPG or cooking gas.

The other day, LPG Marketers Association (LPGMA) increased the price of their cooking gas by P4 per kilo. Major LPG manufacturers like Shell and Petron increased prices by only P2.25 per kilo. It was not known if the two major oil players would implement more increases on LPG prices to match the increase made by the LPGMA.

“There is no shortage in LPG supply. There was a surge in demand in the last week of August because of the premature announcement that prices would increase by P4.50 per kilo. The pronouncement resulted in a surge in buying or panic buying – so according to some of the people in the industry, business has been brisk and a lot of customers were buying. Supply exceeded average levels of all major suppliers,” he said.

DOE director Zenaida Monsada, on the other hand, said the department is currently studying the possibility of penalizing those making premature price adjustments.

“There have also been concerns raised on whether the DOE can act on the early pronouncements of price increases made by some in the LPG industry that result in panic buying,” Monsada said.

Monsada said that last week there were pronouncements of a P4 to P4.50 per kilo increase as a result of the increase in contract price of LPG in September.

The report resulted in queuing by consumers especially at the Liquigaz Terminal. There were also reports that the long lines were caused by the alleged refusal of Petron, Shell and Total to sell enough LPG to the independent refillers, she said.

Petron public affairs manager Virginia Ruivivar denied that there is a shortage of LPG.

“Based on our projected sales and our normal level of sales and the inventory, we actually have a surplus of more than 4,000 metric tons,” Ruivivar said.

Total spokesperson Malou Espina, meanwhile, denied the alleged hoarding of LPG products.

“I would like to address the issue raised by the wholesalers that they are not able to draw supply. Our average sales to wholesalers stand at 130 metric tons per day but during the last week of August it increased to 250 to 280 MT/day. So there was absolutely no reason for the wholesalers to say that they cannot get supply. As we mentioned, we continue to have normal supply and we’re able to serve the normal needs of our customers and we have more than enough for everyone,” Espina said.

LPG refillers raised prices early this year allegedly after big traders started hoarding, which prompted the DOE to call all LPG stakeholders and conduct an investigation on the allegation.

The DOE probe though revealed that there was sufficient supply of LPG and the apparent shortage was brought about by the unusual surge in demand.

Reyes said instead of making premature statements, the LPG refillers should be wary about under-refilling and substandard LPG cylinders.

“We don’t see any shortage in the near-term. There is no problem in supply, but there is a problem on substandard cylinders that continue to be used by the market,” he pointed out.