Why do LPG prices change monthly? The main factors involved

Almost every month, users hear that the price of a gas cylinder has gone up or down. Why do LPG prices change monthly like this? This article explains the main factors affecting retail LPG prices in Vietnam and suggests how dealers can inform customers when prices are adjusted.

Domestic gas prices follow world prices

The gas used in homes and restaurants is liquefied petroleum gas (LPG), made up mainly of propane and butane — see what is LPG. Domestic supply comes from oil refineries, gas processing plants and partly from imports; whatever the source, domestic selling prices mainly reference world LPG prices.

In the Asian market, a common benchmark is the CP (Contract Price) for propane and butane published monthly by Saudi Aramco. When the CP for a new month is published, domestic gas companies usually use it to calculate and adjust retail prices. This is the main reason gas prices tend to change on a monthly cycle, and new prices usually take effect at the start of the month.

The factors that make up the price of a gas cylinder

• World LPG prices (CP): fluctuate with oil and gas supply and demand, seasonal heating demand in many countries and the geopolitical situation.
• Exchange rates: LPG is traded internationally mainly in US dollars; when the exchange rate changes, the price converted into Vietnamese dong changes too, even if the CP stays the same.
• Freight and premiums: shipping rates, insurance and differentials depending on the source of supply.
• Domestic costs: storage, filling, transport, cylinder depreciation and the distribution network.
• Taxes and fees under current regulations.

Because many factors act at once, increases and decreases in domestic retail prices do not always match changes in world prices exactly.

The gas price is not the cylinder price

A common point of confusion: when we say gas prices change monthly, we mean the price of the gas inside the cylinder that customers pay each time they exchange a cylinder. The cylinder price — what a dealer invests when buying new cylinders, or the deposit a customer pays when buying a cylinder for the first time — depends on other factors such as steel prices, specifications, order quantity and inspection costs. See what determines LPG cylinder price.

Are gas prices the same across brands?

Not entirely. Each company announces its own prices according to its costs, sources of supply and policies, so prices may differ between brands and regions; the timing and size of adjustments are also announced by each company.

How should dealers announce price changes?

• Announce early: when you receive a new price list from your supplier, update it straight away in the shop, on Zalo and on Facebook.
• Explain briefly: the price is adjusted in line with world prices, and from which date it applies.
• Quote the price when taking the order, rather than letting customers learn the new price only at payment.
• Keep prices consistent across staff and channels.
• Restaurant and business customers: agree clearly in the contract how prices are adjusted each month.

Price transparency is an important part of keeping customers for the long term.

How can users reduce the impact of price fluctuations?

No one can control world prices, but you can use gas more economically: cover pans when cooking, adjust the flame to the size of the pan base and clean the burners regularly — see how to save gas when cooking. Knowing how long a 12kg gas cylinder lasts also helps households plan their spending.

For dealers, changing prices and suppliers’ Tet holiday schedules are good reasons to order according to a plan; our guide to preparing gas stock for Tet early explains how to forecast from last year’s sales and secure supply for the peak season.

Frequently asked questions

Written by the VietnhatGas technical and sales team — a batch manufacturer of LPG cylinders. This content is for reference; regulations and standards may change, so please check the current texts.