By Myrna M. Velasco
It will be a new round of financial distress for motorists this week as prices at the pumps will be on upswing – with gasoline rising by P1.05 per liter; while diesel and kerosene products will be up by P0.70 per liter.
As of press time, the oil firms that already advised on pump price hikes include Pilipinas Shell Petroleum Corporation, PetroGazz, Seaoil, PTT Philippines, Phoenix Petroleum Philippines, Inc. and Chevron (for Caltex brand) effective Tuesday (July 16); while their competitors are anticipated to be following this week’s price trends.
On account of inclement weather condition that had hit the Gulf of Mexico and the reported drop in the crude inventory of the United States, global oil prices headed for a rally last week.
Given that the Philippines is a market that is highly dependent on imports, the factors inducing price volatilities in the world market essentially have spillover effect in price swings at the domestic pumps.
In a monitoring report of the Department of Energy (DOE), it also cited the nine-month extension of the “market rebalancing agreement” between the Organization of the Petroleum Exporting Countries (OPEC) and counterpart producers led by Russia as a facet that will have longer term effect on international prices.
Markets are on a wait-and-see whether major oil producers such as Saudi Arabia, Russia and the United Arab Emirates, which have their spare capacities, will actually stick to their committed production limits because that will essentially trigger a degree of tightening in supply.
By arresting supply glut in markets amid forecasts of slowdown in global economic growths, it is seen that risks of prices plummeting to the rock bottom level of US$30 per barrel may no longer be a possibility.