Posted: Wednesday, September 15, 2021. 4:49 pm CST.
The views expressed in this article are those of the writer and not necessarily those of Breaking Belize News.
CONTRIBUTED: Since the beginning of this year, the wholesale and retail price for Liquefied Petroleum Gas (LPG), has seen seven price adjustments in Belize, the first of which came into effect on January 9, 2021, and the most recent was on August 31. LPG, which is commonly referred to as butane, is actually a mixture of 70% propane and 30% butane.
The price adjustments in the local LPG price are triggered by the steady and continuous rise in the international price for propane and butane as referenced in the Mont Belvieu index which are currently at their highest levels since 2012. The price shown on Mont Belvieu index (Mont Belvieu is in Texas, USA) is the foundation or reference price used in Belize, and this is combined with shipping and other charges to determine the local price of LPG.
On the international scene, propane prices have gone from a low of US$ 0.20 per gallon on March 23, 2020, to a recent high of US$ 1.20 per gallon on September 3, 2021. That is a multiple of 6 times in 18 months. Butane price trends are similar with prices on September 23, 2021, at US$ 1.48 per gallon.
The increase in LPG price has affected the entire region. In Guatemala for example, the official government website shows a price per hundred lb cylinder at $133 Dollars Belize which is higher than the price in Belize.
The below graph shows the price increases in Propane and Butane over the last three months alone.
The current imbalance in supply and demand compounded by the COVID-19 pandemic and high seasonal demand (primarily attributed to increasing demand in Asia’s markets as US production and inventories dwindle) is driving the current price surge. In addition the US is entering its winter season and the price of LPG is expected to increase further as both butane and propane use increase during the winter months.
Apart from the increase use of propane for heating in the winter months, propane is also an important component in the production of medical-grade plastics such as syringes and other medical supplies which are in heavy demand at the moment due to the COVID-19 pandemic.
As the international price of both propane and butane continues to rise, it is expected that Belize will see additional increases in the local price of LPG or what we locally call “butane”.
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