FACTORS AFFECTING LPG GAS PRICES.

WHAT FACTORS AFFECT DOMESTIC LPG PRICES?

LPG prices change according to the monthly CP price.

What is CP Price? CP Price (Contract Price) is a reference price published by major suppliers like Saudi Aramco to price LPG in the international market. The global gas CP price is usually announced at the end of the month and applied from the beginning of the following month.

Why does the price of LPG change monthly? The ability to extract and produce liquefied petroleum gas (LPG) in Vietnam currently cannot meet domestic consumption. Therefore, the LPG supply still depends on imports from countries with large gas reserves, which is why the price will fluctuate according to the import price of LPG.

In addition, there are many other factors that also affect the price of LPG, including:

Exchange Rate:

The LPG price is calculated based on the CP factor, while the Saudi CP is calculated in US dollars (USD/ton) per ton of goods. When calculating the price domestically, the USD/VND exchange rate in Vietnam must be considered.

LPG Transportation Costs:

This includes transportation by ship (import) to Vietnam and domestic transportation by tanker trucks: from the warehouse to the bottling plant, from the plant to distributors, and specialized stores.

Transportation costs vary between regions depending on the distance from the factory/warehouse. Transportation costs account for a significant portion of the LPG price. In addition, warehousing costs also have a significant impact on the LPG price.

Production Volume:

LPG gas prices also depend on the total volume of business. Typically, customers using larger volumes will have better prices or receive price incentives and accompanying promotions. In addition, costs such as equipment, management, etc., also depend on the volume of gas business.

Price Fluctuations Based on Supply and Demand:

Seasons and weather also affect the price. In winter, the demand for heating in cold regions such as Europe and North Asia will increase. When demand increases, it impacts the price increase. The demand for LPG and the demand for other petroleum products are different, so they do not impact the price at the same time.

Taxes:

Government policy impacts the price through taxes such as import tax, VAT, etc. Currently, LPG imported into Vietnam is subject to both import tax and value-added tax.

In addition, the LPG price will also be adjusted due to the impact of natural disasters, wars, etc.

In conclusion, the domestic selling price of LPG is subject to the new price announced monthly by the Saudi CP. In addition, the domestic gas (LPG) price also depends on the exchange rate, taxes, transportation costs, and related costs of each period.

DATA ENERGY COMPANY LIMITED (DATA Energy)

• Supply LPG, CNG, LNG.
• Consult, Design, Install Industrial Gas System.
• Invest Gas System (LPG, CNG, LNG) for the factory.