Posted: Sunday, October 17, 2021. 3:45 pm CST.
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CONTRIBUTED: Last week the Belize Bureau of Standards announced that the price of Liquefied Petroleum Gas (LPG), locally known as “butane”, has risen again, the second price adjustment in two weeks. In fact since the beginning of this year, the wholesale and retail price for LPG has seen nine price adjustments in Belize, the first of which came into effect on January 9, 2021, and the most recent was on October 12. LPG, which is commonly referred to as butane, is actually a mixture of 70% propane and 30% butane.
And based on international trends, Belizeans will not be seeing a break in the high prices of LPG any time soon. International LPG prices continue their surge with Mont Belvieu (MB) prices jumping to the highest levels since 2014.
To put this in context, Mont Belvieu LPG prices in September 2021 were 7 times more than in March 2020. Furthermore, on October 1, 2021 MB propane prices topped US$1.52 per gallon, up by some US$0.22 per gallon in two weeks. Closer to home, Guatemala has also been feeling the brunt of the surging prices as they have this week increased their regulated price for a 100 lb cylinder of LPG from Q480 (BZ$133) to Q528 (BZ$147). (Source: Government of Guatemala).
Even though the current regulated pricing regime holds the importer’s throughput cost and the distributors’ wholesale and retail margins constant, the rising acquisition prices are directly causing the increasing “Butane” prices that Belizean consumers are currently seeing on the arrival of each new LPG shipment to Belize.
As shown in the below graph, industry projections do not forecast any relief in prices until the summer months of 2022. The diminished production in the US and Russia, coupled with increasing demand in European and Asian markets, and low inventory levels worldwide all translate into a “perfect storm” slamming the LPG industry.
The most recent price adjustment (ie. on October 12) in Belize saw LPG prices rise by 38 cents per gallon or 8 to 9 dollars per 100 pound tank, depending on whether you are in rural or urban areas. The new prices currently in effect locally are: $4.75 per gallon wholesale, $6.35 per gallon retail in the municipalities and $6.45 in the rural areas. In Belize, a typical hundred-pound cylinder now cost 144 dollars in urban areas and 147 in rural areas.
The Bureau blames a combination of factors including rising heat on the U.S. West Coast and production issues on the Gulf Coast attributed to hurricane Ida, as well as rising worldwide demand for natural gas.
The following are some links to recent articles in the international media.
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