Sky-high fuel prices minimize LPG usage

Rising fuel prices prompted the decline of Liquefied Petroleum Gas (LPG) consumption in the Philippines.

Pilipinas Shell Petroleum Corporation LPG Zone Channel Manager for Central and Eastern Visayas Leric Sotelo said that there is a 10 percent decline of LPG usage in the Philippines.

He said LPG users have shifted into using traditional method of cooking, such as using kerosene-based stove, charcoal, and firewood.

"The total market for LPG is shrinking, more and more residents have opted for other alternatives, because of the rising cost of LPG in the market," Sotelo said in an interview.

Aside from the upward movement of LPG cost due to expensive fuel price in the world market, the LPG distribution industry is also battered by other trade challenges, like illegal refilling, tampering of cylinder, among others.

Because of these problems, Sotelo said big LPG suppliers such as Pilipinas Shell, is now concentrating their efforts on providing good customer relations to its customers, and provide much improved product quality.

For Shell, Sotelo said the company is trying to concentrate on its Customer Value Proposition (CVP), to provide safe, clean, exact weight, and accessibility of its product from smaller to bigger community areas in the country.

He said LPG companies, like Pilipinas Shell cannot do something about the market shrinkage, because it is brought about largely by economic factors.

According to Sotelo, the shrinkage of LPG usage among residential market has affected the growth of LPG business in the Philippines, especially for Pilipinas Shell, because 75 percent of its total customer profile are residential users, while only 25 percent are corporate users like restaurants, bakeries, among others.

In Cebu, Pilipinas Shell's Shellane LPG brand is dominating the LPG market with 30 percent share, while it holds 23 percent of the nationwide market, Sotelo said.

Other smaller players in the industry have also eaten part of the share previously enjoyed by the bigger companies, thus investment on customer satisfaction and safety is being embarked by LPG providers now, he added.

Early this week, one of Pilipinas Shell's biggest distributors in Cebu, the Quick Way Shellane Center, opened its 5th Shellane showroom in Talamban, this is part of the joint venture of Pilipinas Shell and its distributors to protect its consumers from being victimized by fake LPG traders, and provide accessibility, and better customer service to its captured market.

According to Sotelo, Shellane distributors are encouraged to put up a showroom facility in order to control the proliferation of illegal trade in the LPG business.

A showroom, which is a one-stop-shop for Shellane consumers' need, is a joint investment between the distributor and Pilipinas Shell.

"We would like to transfer our volume of distribution to our controlled panels, like the showrooms, gasoline stations, to further protect consumers [from availing fake LPG products]," Sotelo said.