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This section outlines official Press and Media Statements issued by the Ministry of Information and Communications in addition to Press Releases from the Prime Minister's Office and other Government Ministries and Departments.

New LPG Prices for September 2013

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13 September 2013 The Competent Authority Committee has approved the new LPG prices for September 2013 to be effective as from Monday 16 September 2013 and therefore wish to notify the public accordingly.

There is a significant increase in LPG Price for Tongatapu and Vava'u for September 2013 compared to the price approved by the Competent Authority in June 2013. The retail price for Tongatapu have increased by 0.18 seniti per kilogram to $4.46 seniti per kilogram (equivalent to 4.2% increase) and retail price for Vava'u have increased by 0.34 seniti per kilogram to $4.67 seniti per kilogram (equivalent to 7.9% in increase). The wholesale price for Tongatapu have increased by T$183 per tonne to $4,027 per tonne (equivalent to 4.8% increase)and the wholesale price for Vava'u have increased by T$342 per tonne to $4237 per tonne (equivalent to 8.8% in increase).

LPG price for September 2013 is mainly determined by the movement of Saudi-Contract prices during July-September 2013. For cargoes received in Tongatapu in 2013, the average price  US dollars) is down by US$23/tonne compared to the previous quarter. Recommended wholesale prices have been calculated using the Tonga LPG Price Template updated based on TCA decisions on the Annual LPG Price Review report 2013.

The significant increase in the LPG price for Tongatapu and Vava'u for September 2013 is attributed to the following reasons:

* Butane prices rose for the third straight month, reaching a high of USD875/tonne (September) after falling in the second quarter to allow of USD770/tonne (June). Much of the increase in butane price in this quarter is due to the significant increase in crude oil price. Over this time the crude oil price has increased from close to USD 100/bbl to USD117/bbl due to rising geopolitical tensions, at a time of improving demand signals and tight supply.

*Crude oil (Dated Brent) spiked on 28th August (USD116/bbl), in response to threats by United States for a military intervention in Syria. Crude price has been gaining momentum for since July with low supply from producers in North and West Africa as well as geopolitical tensions building up the Middle East added to upward pressure on prices.

*While crude price increase has been supply led, butane prices increased with crude as it is closely linked to crude price as shown in the graph below. For the cargoes received in the third quarter, the average price (in US dollars) is nearly 4% up on the second quarter. Coupled with a weaker Pa'anga exchange rate relative to the US dollar in the third quarter, the delivered price of LPG to Tonga is up about 6.5% on the previous quarter.

*As a result of the increase in the Saudi CP benchmark price and weakening Pa'anga, the delivered price of LPG to Nuku'alofa is up by TOP 0.18/kg and TOP 0.34/kg in Vava'u. These figures shows the weakening Tongan Pa'anga during the second and third quarter; this has been a significant contributor to the local price increase.

LPG price movements in the fourth quarter will depend on what happens in the crude market and LPG demand for winter heating in the Northern Hemisphere. Crude rices are expected to remain highly volatile. Much of the increase in crude oil prices in the 3rd quarter has been the result of significant risk premium added to crude oil prices due to political instability in the Middle East and supply disruptions in North Africa. Further instability in these regions would result in higher crude prices and likely place upward pressure on LPG prices.


Issued by: The Ministry of Commerce, Tourism and Labour, Nuku'alofa, 2013.

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