LIQUEFIED PETROLEUM GAS PRICES IN RUSSIA HAVE HALFED DUE TO EU EMBARGO

Liquefied Petroleum Gas, which includes propane and butane, is used as a fuel for cars, heating and in the production of petrochemicals.

Liquefied Petroleum Gas (LPG) prices in Russia fell by half in December compared to the previous month. This was due to an increase in gas supplies to the domestic market.

Restrictions on LPG exports to Europe were introduced at the end of November 2022. This decision was made after Poland, a major buyer of Russian LPG, proposed sanctions.

Liquefied petroleum gas, which includes propane and butane, is used as fuel for cars, heating and in the production of petrochemicals.

LPG prices on the Russian domestic market fell to 14,000 rubles per tonne in December, about half the price at the end of November, according to Reuters data based on trade sources and local commodity exchanges.

LPG exports are more profitable, and Russia could earn up to $230 per tonne for supplies to Poland. However, some types of LPG are exportable, but they only make up about 20% of the total volume of LPG exported by Russia.

In recent months, Russia has increased exports of liquefied petroleum gas to China, Mongolia, Armenia, Georgia and Azerbaijan. Exports to China have the potential to grow further, traders said.

Russia also exports LPG to Afghanistan, but market participants say supplies are being held back by payment issues.

“We would be ready to supply LPG to Afghanistan, but our Afghan partners are ready to pay only in cash. And then what do we do with this money? Additional questions and problems may arise during re-importation to Russia,” one of the traders said.