Factors affecting LPG prices – Latest update 2025 | Hiroshima Energy Supply

1. Overview

LPG (liquefied petroleum gas) prices are not fixed but change according to many economic, political and market factors. Understanding the reasons helps Vietnamese businesses proactively plan purchases, sign contracts and optimize operating costs.

2. International factors strongly affect LPG prices

2.1 World crude oil prices

LPG is a by-product of crude oil refining, so LPG prices often fluctuate in the same direction as Brent or WTI prices..

• When oil prices rise (due to war, OPEC cut production), LPG price increased accordingly.

• For example: At the end of 2022, the Russia-Ukraine conflict caused oil prices to skyrocket, causing LPG prices to increase by 20-30%.

2.2 Geopolitical situation – war

Large LPG production and transit areas such as Middle East, Russia, Red Sea If a conflict occurs:

• Supply disruption

• Increased logistics costs → LPG prices increase

2.3 Policies from OPEC and major producing countries

The increase/decrease in output from Saudi Arabia, Qatar, USA, Russia… will directly affect the supply-demand balance, causing LPG prices to fluctuate strongly.

2.4 Foreign exchange rates (especially USD)

LPG is traded mainly in USD. When the USD strengthens against VND, LPG import prices will increase even if international prices remain unchanged.

2.5 Transportation costs – logistics

Increasing shipping, container and fuel prices will push up the price of imported LPG, especially if the route is closed. Suez or Hormuz interrupted

3. Market & demand factors

3.1 Season – weather

• Winter at Europe, China, Korea → heating demand increases → LPG price increases.

• El Nino phenomenon, drought → gas demand in food production and processing increases.

3.2 Economic growth – consumption

• Economic recovery → industrial production, household consumption increase → LPG price increases.

• Economic recession → demand decreases → LPG prices may decrease.

3.3 Environmental policy – clean energy

Switching to electricity, hydrogen, solar energy… is possible Long-term reduction in LPG demand, creating downward pressure on prices.

4. Domestic factors (in Vietnam)

4.1 Taxes – import fees and reserves

Import taxes, environmental protection fees, storage costs, etc. directly affect the retail price of LPG.

• The government increases taxes → domestic LPG prices increase immediately.

4.2 Domestic supply and inventory

Vietnam still depends heavily on imported LPG, so if supplies are disrupted or inventories are low, prices can fluctuate sharply.

5. Summary table of factors affecting LPG prices

Conclude

Understanding the factors affecting LPG prices will help businesses Proactively contract, manage inventory and optimize energy costs.
With commitment “Providing safe – stable – economical LPG”Hiroshima Energy Supply always updates market developments to bring optimal solutions to customers.