Bulk LPG - Cheapest suppliers / supply route?

bobmac62

I have just come to the end of my first 12 month period with AVANTI at 30ppl and have been advised that an increase of 6.82ppl will apply for the final 12 months of the contract. A large increase, but reflecting the current oil/petrol retail pricing. I hope that price levels recede by next July.

JerryW

bobmac62 said:

I have just come to the end of my first 12 month period with AVANTI at 30ppl and have been advised that an increase of 6.82ppl will apply for the final 12 months of the contract. A large increase, but reflecting the current oil/petrol retail pricing. I hope that price levels recede by next July.

I can only repeat my usual advice, which is to negotiate a 24m contract. I am on one with Flogas at the moment and had one with Avanti before.

If you have some leisure time, you could do worse than ask Avanti to break down and justify their increase, with specific reference to the indices that their contract specifies, and not let them off with "our costs/gas costs have gone up."

Your contract will specify a maximum for operational costs increase pa, typically 4p/l. tell them you are willing to pay that and no more, see what happens ...

bobmac62

Thanks for your comments Jerry W. These concur with my action to request the breakdown of the increase as my contract specifies a maximum of a 3ppl increase in year 2. I will update on their response.

bobmac62

I received the following index from Avanti to explain their 6.82ppl increase for year 2 of my contract

https://www.theice.com/products/6590282/Propane-Argus-CIF-ARA-Future/data?marketId=5680732&span=2

mcmullank

bobmac62 said:

I received the following index from Avanti to explain their 6.82ppl increase for year 2 of my contract

https://www.theice.com/products/6590282/Propane-Argus-CIF-ARA-Future/data?marketId=5680732&span=2

Working the raw numbers on this would indicated that in July last year the ppl in GBP was 10.5 and it is now 22.97.  However it is important to note that this is a futures chart for delivery in July 2022 which isn't really relevant to Avanti's costs as this only shows what delivery to Avanti in July 2021 would have cost dependant on when it was purchased.  
To see how their input costs have changed you would need to compare this with July 20 contract costs from last year and this chart does not provide that information.

LittleVermin

bobmac62 said:

I received the following index from Avanti to explain their 6.82ppl increase for year 2 of my contract

https://www.theice.com/products/6590282/Propane-Argus-CIF-ARA-Future/data?marketId=5680732&span=2

Very useful! Many thanks. But (of course) they have sent a link to a 'frightening' graph ...with an ever-increasing upward line over 1 YEAR. Good also to look at this line - over 2 YEARS.... then see where you made the contract. https://www.theice.com/products/6590282/Propane-Argus-CIF-ARA-Future/data?marketId=5680732&span=3

Good luck with your negotiations!

JerryW

bobmac62 said:

I received the following index from Avanti to explain their 6.82ppl increase for year 2 of my contract

https://www.theice.com/products/6590282/Propane-Argus-CIF-ARA-Future/data?marketId=5680732&span=2

Well done, for getting some (apparently) genuine index information from them. A step in the right direction, because access to such indices is scarce .. of course the information relates only to futures, but most or all of the gas they buy is acquired that way so it is still relevant.

Someone who knew a lot more than I do about urls could probably persuade that website to provide more relevant data still.

But the indicated strategy of getting as many competing offers as you can, all valid for the life of a 2-year contract, seems hard to beat if you are stuck with lpg

Jerry

collectors

Last year Flogas gave me a hike from 32plt to 40p lt That's a 25% hike. Will be shopping around soon for another supplier as the tanks down to 35%, but we are in the summer & only using 2-3% per month. If i save £70 a year, i am fine with that & it only takes an hour or less to swap. I dont make £70 an hour, so its a win/win.

shambly

So, we're just coming out of a 2 year fix which had us paying 30p/L in year 1 and 33p/L in year 2.

What sort of pricing is the market currently at?

First impressions are that we'll be able to find a 2 year deal at somewhere around the price that we are exiting our current deal with? And that won't be with Calor, who seem much more expensive than the other vendors.


Thanks in advance.

thozza

Recently received the following background information from our supplier in connection with the price of LPG, as we're on a variable deal now:-

When we first implemented the increase in January, the ANSI had risen to $460, further rising in March to $536.50, and now in July the price is up at $585... market intelligence which anticipates that the supply price will remain high as we continue through the summer months. Therefore it is most likely to be a similar story moving into  winter.