LPGMA: Luzon may lose 25% of LPG supply with temporary close of Shell terminal

A party-list representative on Wednesday said that Luzon may lose a quarter of its supply of liquefied petroleum gas (LPG) when Pilipinas Shell Petroleum Corp. temporarily shuts down its oil refinery, unless the Department of Energy steps in.

This is on top of Shell's closure of its import terminal in Tabangao, Batangas, which has already aggravated the LPG supply situation, the official added.

"All of Luzon is facing a 25-million kilo per month LPG supply disruption starting next month, and this will surely put greater upward pressure on retail prices at the expense of consumers," LPG Marketers’ Association (LPGMA) representative Arnel Ty said in an e-mailed statement.

"We are gravely worried that the bigger oil firms that continue to dominate the LPG market might take advantage of the supply turmoil to unfairly jack up their prices in the weeks ahead. Crooked LPG traders might also come in and exploit the disorder to the detriment of consumers,” Ty said.

Last September, Pilipinas Shell permanently closed down its Tabangao, Batangas LPG import terminal—which has a capacity to store 42 million kilos of LPG—citing business reasons.

The closure drove cooking fuel providers to source supplies from Liquigaz Philippines Corp.’s import terminal in Mariveles, Bataan.

Other LPG import terminals left running in Luzon are relatively small. These include Pryce Gases Inc.’s 6-million kilo terminal in San Fabian, Pangasinan; Petron Corp.’s 3.5-million kilo terminal, also in Mariveles; Petron’s 2.5-million kilo terminal in Mabini, Batangas; and Isla LPG Corp.’s 800,000-kilo terminal in San Fernando, La Union.

“This has created a logistical nightmare for LPG suppliers," said Ty, who is also House Deputy Minority Leader.
 
The representative renewed LPGMA’s plea for the DOE to reopen Shell’s now-deactivated LPG import terminal, to allow the faster transfer of more supplies from abroad.
 
“Actually, what we are asking is for the DOE to facilitate LPG throughputting agreements, using Shell’s already inactive terminal, for 12 to 36 months—the time needed for other oil firms to put up new import terminals,” he said.

But Ty warned that Shell’s oil refinery in Tabanago, Batangas, will undergo a maintenance shutdown in March, and thus stop producing Southern Luzon’s residual 10 million kilos of LPG supply every month. — Danessa O. Rivera/BM, GMA News