Small players get bigger share of LPG market

Small oil players continue to eat up a major portion of the liquefied petroleum gas (LPG) market proving that the oil deregulation law has benefited that oil firms, specially the new ones.

Energy Secretary Raphael P.M. Lotilla said in 2004, Liquigaz Corp. cornered a substantial portion of the LPG market at 21.1 percent. Petronas Corp. accounted for a big portion of the LPG market in Mindanao with 18.1 percent while Pryce Gas had 24 percent.

The energy chief made this statement amid proposals from some sectors to put a cap on the prices of the socially-sensitive cooking gas (LPG) to protect the consumers from the continuing rise in LPG contract prices abroad.

"There are proposals but we will have to wait for results from the review committee because if we take a look, the LPG market has been opened up as a consequence of the oil deregulation law," he said.

Lotilla said in the National Capital Region, Liquigaz accounted for a 21.1-percent share of the LPG market; Nation, 6.2 percent; Total, 5.7 percent, Petron, 34.1 percent; Shell, 31.6 percent; and Caltex, 11.3 percent.

On a nationwide basis, Petron has 26.5 percent; Shell, 22.8 percent; Caltex,7.6 percent; Liquigaz, 20.5 percent; Nation, 18.1 percent; Pricegas, 4.4 percent; Total, 7.6 percent; and Petronas, 2.4 percent.

The increasing share of other oil firms which used to be cornered by the three major oil firms-Petron, Shell and Caltex- has made the market more competitive Lotilla said.

Under the Downstream Oil Industry Deregulation Act of 1998, oil firms can price their products based on market forces so as to encourage competition. The deregulation law also prohibits the government from intervening or influencing the pricing schemes of the oil companies.

However, the government, through the Department of Energy (DOE), has monitoring powers. For monitoring purposes, the DOE has requested the oil firms to report to the department prior price adjustment moves.

Due to the continued volatility in world oil prices, there were calls to review the oil deregulation law. Included in the proposed amendments to the said act, among others, is giving back the government authority to control prices amid a volatile international crude market.