Imports to stabilize cooking gas supply

MANILA, Philippines - Cooking gas supply is expected to stabilize with imported shipments coming in this weekend, but both the government and industry stakeholders were noncommittal on whether prices would also be adjusted downwards. In a press conference Monday, the Energy department and major liquefied petroleum gas (LPG) sellers the shipments would arrive on Jan. 25. Independent retailers led by the LPG Marketers Association (LPGMA) have complained of tightness in supply that has affected 30% of their operations. LPGMA supplies around 30% of the Luzon market. "The supply situation is normalizing. We have also ironed out problems in the LPG distribution line. The suppliers, importers and refiners on Jan. 25 are expected to have an increase in importation of LPG," Energy Secretary Angelo T. Reyes said. Mr. Reyes also said that prices of LPG would stay at P470-P480 per 11-kilogram (kg) cylinder tank. "We don’t want other people in the industry to take advantage of the situation and sell products higher. We will also be sending out our DoE-DoJ (Department of Energy-Department of Justice) Task Force teams to inspect importers, refiners, refillers and dealers to check for unusual levels of inventory and to also monitor prices closely," Mr. Reyes said. Jose K. Campos, Petron Corp. vice-president for marketing, said they have enough supply for the rest of the month. "We feel that over the next few days, all unserved demand will be already be taken cared of." Bernard Ong, Shell LPG general brand manager, said they have inventory that could last for 20 days. "We have enough inventory and continuing regular refinery production to be able to meet the forecast demand that we have for the coming period," Mr. Ong said. Shell is one of two oil companies that have refining capacity. The other is Petron. Both firms, however, still import on-third of their supply. Mr. Ong said Shell will increase imports in line with a refinery maintenance shutdown that could last for 40 days. "We are importing quite a substantial amount of LPG to make sure there’s no [supply] disruption," he added. Petron, which is also having a maintenance shutdown in its Bataan refinery since December, would resume operations early February and run at full capacity in March. Mr. Reyes confirmed that LPG prices are expected to be higher next month with contract price seen rising by $70-$100 per metric ton (MT), or an additional P33 for an 11-kg tank. Contract price of LPG rose to $380/MT in January from $336.50 in December. Total Philippines, Inc. spokesman Malou Espina, meanwhile, said they are expecting 6,000 MT of LPG imports on Sunday. — Ava Kashima K. Austria, BusinessWorld