LPG Prices Set to Rise in Philippines Due to Higher Fuel Costs and Weaker Peso

Consumers in the Philippines will face a slight increase in liquefied petroleum gas (LPG) prices, projected to rise by P2 to P3 per kilogram in September. This adjustment translates to an additional P22 to P33 for a standard 11-kilogram LPG cylinder. Industry projections indicate that the price hike is driven by a combination of higher shipping costs and the depreciation of the Philippine peso. Arnel Ty, president of Regasco, explained that the higher dollar conversion rate in August compared to the previous month significantly impacted costs. "The dollar conversion rate was higher in August compared to the previous month, which means the value of the dollar is higher than the peso and its impact is an increase of around P0.30 per kilo," Ty said. Furthermore, a $40 per metric ton increase in shipping costs during August, attributed to three consecutive weeks of rising crude oil prices, also contributed to the anticipated rise in LPG prices. "As for shipping costs in August, it is higher by $40 per metric ton due to three weeks of consecutive rise in crude oil," he added. The Philippine peso has weakened, breaching the P62-per-dollar mark on August 27 for the first time and showing a continued downward trend. Analysts anticipate further weakening of the peso as crude prices edge up. Global crude oil prices remain elevated due to uncertainties in the Middle East, with benchmark Brent crude hovering around $90 per barrel in Monday’s trading after the United States attacked Iran for the first time in a month. In contrast, pump prices for gasoline, diesel, and kerosene are set to decrease today, following two consecutive weeks of increases. Seaoil and Shell have announced price cuts for their fuel products, with Seaoil reducing gasoline by P0.32, diesel by P3.83, and kerosene by P3.84 per liter. Shell will cut gasoline prices by P0.30 per liter, while diesel and kerosene will be reduced by P3.80 per liter. The Philippines is currently under a state of national energy emergency. LPG and kerosene are subject to a 15-day price freeze in areas declared under a state of calamity. Ty urged local government units to issue such declarations before the scheduled price increases take effect.