By Myrna M. Velasco
It will be another punishing week in the pockets of Filipino consumers – especially for motorists using gasoline because that commodity will be rising at the pumps by as much as P1.45 per liter starting this morning (March 19).
In addition, the prices of diesel and kerosene products will climb by P0.30 and P0.40 per liter, respectively, based on the pricing adjustment advisories of the oil companies.
Cost swing first-movers this week have been Pilipinas Shell Petroleum Corporation, Chevron Philippines, Inc., PetroGazz, Seaoil and Eastern Petroleum while the rest of the industry players are anticipated to follow on their Tuesday routine.
Philippine pump prices follow cost movements in the international markets – which in the past trading days were still gyrating on the impact of array of geopolitical factors – ranging from production cuts to political tension in oil-producing countries, primarily in Venezuela and Iran. Before this week’s raft of price adjustments, the per-liter cost of gasoline had been ranging from P45.25 to P60.89 per liter; diesel at P41.40 to P50.23 per liter; and kerosene at P44.90 to P53.45 per liter.
In the international scene, as indicated by the Organization of the Petroleum Exporting Countries (OPEC) last week in a press briefing with global journalists, markets may still be on convulsive movements in the coming months – although price softening could come as a high probability because of higher output injected into market by shale producers of the United States. OPEC Secretary General Mohammad Sanusi Barkindo said “when we talked about what the projection would be for 2018 – 98% of them (shale producers) called for a much lower expansion figure in terms of supply, but even the industry was sort of taken aback by this expansion in supply.”
He stressed the phenomenal rise in shale output had been “due to factors at play in the most efficient and prompt manner, remarkable improvement in the technology of fracking (hydraulic fracturing) and the continued ability to attract funding from Wall Street and ability to rationalize cost.”
Amid such recent developments though, OPEC is still non-committal on any prospective extension of its six-month agreement with non-OPEC producers led by Russia on committed output cut of up 1.2 million barrels per day. Barkindo reckoned “the stability of the oil market is not only good for OPEC, it’s not only good for non-OPEC but it’s also good for the players of the shale basins.”
OPEC has been extending the ‘bridges of dialogues’ with all other constituencies of the global oil sector as part of the overarching effort to contain cycles of pricing volatilities in the world market. And with these three core market players fusing together, the world of oil may continually see the strapping force of their ‘triangle’ when it comes to shaping the global oil market’s future.
The OPEC secretary general added “they (shale producers) have seen it themselves that they’ve been benefiting from the joint decisions taken by OPEC and non-OPEC to restore stability of these dislocations that have extremely grown longer than those cycles — resulting in the filing of bankruptcies of more than 200 companies and over half a million jobs lost in this industry globally.”