Updated butane costs this April

With some cold days still to come, the beginning of April has seen a rise in the price of butane gas cylinders.

Anyone needing to top up their supply of butane gas will pay more this April, as confirmed by the Official State Gazette (BOE).

Impact of price increase

As of mid-March, the price for butane saw an uptick, yet remains regulated under government constraints. This development emerges amidst the backdrop of Spain’s legislation, specifically Royal Decree-Law 11/2022, enacted on June 25, which caps the price of butane cylinders weighing between eight and 20 kilograms at €19.55.

This ceiling was maintained until the end of 2023 as per Royal Decree-Law 5/2023 issued last June. Currently, the price stands at €16.67, indicating a rise from the previous rates.

Despite the increase, the cap on butane prices has somewhat cushioned the blow for consumers, especially when compared to the soaring costs of electricity.

Formula behind the pricing

The pricing of butane cylinder prices involves several factors, including the cost of raw materials such as propane and butane on the international market, transportation costs, and the fluctuating euro-dollar exchange rate.

Additional charges include a 21 per cent VAT and a Special Tax on Hydrocarbons of €1.5 per kilo. This pricing structure was adjusted following geopolitical tensions, notably Russia’s incursion into Ukraine, leading to a governmental decree that prices of butane cylinders can only fluctuate within a 5 per cent margin.

Understanding liquefied gas

Bottled Liquefied Petroleum Gas (LPG), a hydrocarbon blend dominated by butane, presents a viable energy alternative for regions beyond the reach of natural gas networks. Spain, with an annual consumption of approximately 64.5 million containers, LPG’s usage has witnessed a decline, dropping over 25 per cent from 2010 to 2021.

In light of these adjustments, households reliant on butane for heating and cooking will need to prepare for higher expenditures this April.

The pricing mechanisms and government interventions aim to balance market realities with consumer affordability, ensuring that the impact on the populace is mitigated amidst fluctuating global energy costs.