LPG prices likely to decline

Following the reduction in Saudi Aramco Contract Price for LPG which fell from $974 to $955 per ton, local LPG prices are likely to decline by Rs 1,900 per ton or almost Rs 2 per kilo with effect from 3rd January 2013. "The market was anticipating a far greater decline given the already high CP of December, but demand from Western Europe and China has remained strong," said Belal Jabbar, spokesman for LPG Association of Pakistan.
Under the present pricing regime whereby local producer prices are indexed to Saudi Aramco CP, LPG producers are likely to reduce their price by a nominal amount of Rs 1,900 per ton. "The actual impact of the decline may not be felt in the market since any decline in the CP will be offset by the depreciation of the Pak Rupee," said Belal.
However unlike last month when local production hit a snag due to closure of JJVL's facility, supplies are expected to improve this month as JJVL begins to supply LPG and more imports make their way into the market. "The improved supplies will help in rationalising prices and correcting the demand-supply imbalance," he said.-PR