With the COVID-19 pandemic impacting markets across the world and the currency fluctuations taking place, the global prices of LPG as one of the world’s most widely used energy sources have been volatile throughout the world.
According to Argus Independent Commodity Price Reporting Agency, the leading independent provider of energy and commodity price benchmarks, rising prices and uncertain economic forecasts overshadow the LPG industry globally. The Argus pricing benchmark ‘Argus Far East Index’ is used widely in Asia, while Saudi Aramco Index is also used in countries such as Sri Lanka.
In Sri Lanka, Litro Gas Lanka, the national LPG provider has consistently maintained stable prices in adhering to the President’s “Vistas of Prosperity & Splendour” economic vision for the country, says Anil Koswatte - Chairman & CEO of Litro Gas Lanka Limited.
“LPG is more than a commodity in Sri Lanka – it is an economic indicator that keeps home fires cooking and multiple industries running. We understand the importance of passing on the economic benefit to the end-user as indicated in the Government’s vision for the nation. As a result, despite currency fluctuations and LPG prices going up worldwide, we have consistently maintained our prices in accordance with this vision”, he adds.
While it is becoming more difficult to predict the pricing structure due to external factors, global indicators such as fluctuating world LPG prices, currency fluidity, and industry demand may result in price variations, adds Janaka Pathirathna, Director - Sales & Marketing/Corporate Affairs at Litro Gas Lanka Limited.
In commenting on the way forward for LPG markets amidst COVID-19, Argus Report states that growth is expected in 2021 resulting in which rising prices are likely to continue until year-end. While seasonality will also drive demand, Argus Report also acknowledges that petroleum price reversals are likely to result in uncertainty of global LPG prices.
Industry experts affirm that while in the developing world, LPG is utilized for domestic and cooking primarily, in the developed world; it is used widely for indoor heating.
“As the national LPG provider, Litro Gas Lanka understands the importance of stabilized pricing – however the rising international prices and rising international shipping and freight rates could burden us further,” says Janaka Pathirathna in conclusion.