Other major LPG distributors — Petron Corp., which sells LPG under the trademark Gasul, Caltex Philippines Inc. (Starflame) and Total Philippines Corp. (Totalgaz) — said they are still studying the effect of raising the prices of their LPG products.
The LPG price increase of Shell was an expected move from the major oil firms since LPG contract prices continue to soar in the international market.
Based on Department of Energy monitoring, the average price of 11-kg LPG tank stood at P378 to P440 as of Sept. 13 this year.
DOE data showed that for the past three months, the LPG contract price has been on an upward trend.
From July of $400.10 per metric ton, LPG prices increased to $404.20 in August and $440.20 in September. The peak price was recorded in November 2004 at $470 per metric ton.
Early this week, an oil industry official said international contract prices for LPG have surged to an all-time high of $515 per metric ton in October compared to the September contract price of $436 per metric ton.
"The $79 per metric ton jump is the highest increase in LPG contract prices since 1999," the official said.
The same official warned of more price increases this month as LPG price differential translates to about P4.72 per kilo in local prices.
Since LPG is normally used by almost all households in the country, the official said the total amount is not likely to be passed in one increase.
"Like diesel, LPG is a socially sensitive commodity and we will definitely stagger our price increases to mitigate the impact of higher contract prices for consumers," he added.
Since July this year, LPG contract prices have risen by nearly $120 per metric ton.
There has been an increase in the demand for LPG since September as it is also utilized as an alternative heating fuel during winter. Western countries usually start building winter stockpiles before the fourth quarter.
LPG prices have also been affected by supply tightness in the United States following the wake of Hurricanes Katrina and Rita which have shut down refineries in the Gulf of Mexico.
Another factor is the increase in demand for butane — one of two components of LPG — as petrochemical feedstock.
Oil companies have increased LPG prices five times or a total of P2.50 per kilo since August.
Local LPG prices follow international price movements since more than 60 percent of the country’s requirements are sourced through importation.