NEW DELHI - Several Asian petrochemical producers plan to switch a portion of their feedstock from naphtha to cheaper liquefied petroleum gas (LPG) late in the second quarter as the price gap between the two fuels has widened, refinery and trade sources said.

A rise in LPG use by petrochemical units could hit Asian refiners' margins for naphtha, which is used to make consumer goods including plastics and clothing.

Profits from making naphtha from Brent crude have already dropped by about 51% to $50.25 a tonne since Feb. 5, when European Union sanctions forced Russia to divert naphtha supplies from the EU to Asia.

This has prompted Taiwan's Formosa Petrochemical, Asia's top naphtha importer, to plan a 10% switch of its naphtha feed to LPG in May, spokesman KY Lin said. The feedstock change is expected to continue until the end of the third quarter.

Formosa is exploring ways to increase use of LPG, a mixture of propane and butane, to more than 10% without affecting its overall petrochemical production, Lin said.

The company has already bought two propane cargoes of 46,000 tonnes each for May delivery, Lin added.

The price of the LPG cargoes was $104-105 per tonne below the Japan naphtha benchmark price, traders said. That has dropped from a premium of $8 to Japan naphtha in early February, according to Reuters calculations based on Eikon data.

Petchem makers typically buy spot cargoes only when prices are at least $50 a tonne cheaper than naphtha.

LPG prices, which rose in tandem with natural gas last year as sanctions on Russian energy trade unfolded, collapsed more than naphtha after winter demand waned earlier this month, consultancy FGE said in a note.

Steam crackers in Asia can typically switch between 10% and 20% of naphtha to alternative feedstock LPG whenever prices are low.

An east Indian cracker operator is also planning to switch to LPG, a company source said, without giving a timeline.

A source at a South Korean petrochemical producer said his company plans to boost LPG use to 15% during summer, up from 10% use in winter months.

Asia is also receiving more LPG from the U.S. and the Middle East as winter demand for the heating fuel has passed.

Monthly U.S. LPG exports to Asia in February and March rose to around 2.6 million-2.8 million tonnes, up 100,000-200,000 tonnes from January, ship-tracking data from Vortexa and Kpler showed.

March supplies from Middle East have risen to the highest level so far this year at about 2.8 million-3.4 million tonnes in March, the data showed.

(Reporting by Mohi Narayan in New Delhi; Additional reporting by Heekyong Yang in Seoul; Editing by Florence Tan and Sonali Paul)