LPG supplier to hike prices by 20 percent

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Posted on May 05 2005
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Businesses using liquefied petroleum gas will have to pay more for it sometime next week after a major LPG retailer on Saipan disclosed that it would increase commercial prices by about 20 percent.

The impending LPG price hike by Wushin Corp. and its retailing arm DL Corp. comes on the heels of a significant 40-cent-a gallon increase by their supplier, South Pacific Petroleum Corp.

DL Corp. representative Joe Digno said SPPC’s price hike was one of its biggest price adjustments so far, with its gallon price breaching the $3 mark.

“Our commercial customers would be affected by this,” Digno said. “We’ll have to observe how they can weather the impact.”

Digno said Wushin and DL Corp. would sell LPGs at existing rates until their supplies last next week. New LPG stock would carry higher rates, he said.

At residential rates, the companies sell LPG in 90-lb cylinders at $75 each. They sell 50-lb and 20-lb LPGs at $44 and $20, respectively. Digno said existing commercial rates are lower. But he said commercial rates would increase by about 20 percent when the companies get their new LPG supply.

Digno said the companies are studying how much they would peg the increases for both commercial and residential rates. But he said the commercial rates would likely absorb the impact.

Last May 1, the companies’ competitor, Saipan Industrial Gas Inc., increased its LPG prices, pegging the price of 90-lb LPG at $79 at delivery rate, an increase of $4 over the previous price of $75. Pickup rate increased from $72 to $75.

For 40-lb LPGs, prices increased by $6 a tank. Delivery rate rose to $45, while pickup rate increased to $42. The new prices for 20-lb LPGs increased by $2, with the delivery rate rising to $25 and the pickup rate to $22.

Saipan Industrial’s general manager Dionisio Lopez earlier said that higher freight costs pushed up Shell Marianas’ LPG prices. Lopez said his company decided to increase household prices of LPG on Saipan to cushion the impact of the LPG supplier’s price adjustment. Lopez recently received a letter from Shell, which claimed that freight rate increased by $160 per metric ton.

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