By Myrna Velasco
Oil companies are expected to rollback the pump price of diesel products this week by P1.10 to P1.30 per liter based on four days of trading in the world market.
For gasoline products, the estimated price cuts will be leaner at P0.50 to P0.75 per liter, while kerosene may be reduced by P0.50 t0 P0.60 per liter.
The oil industry players said the initial estimates may still change depending on the result of Friday (April 17) trading.
Asian market pricing reference Dubai crude was at US$26 per barrel as of Thursday, while international benchmark Brent crude was at US$28 per barrel. West Texas Intermediate (WTI) crude of the US market skidded below US$18 per barrel – inching very close to forecasts of global prices to as low as US$15 per barrel.
The lingering lockdowns in many countries due to the coronavirus pandemic have restricted the movement of people, hence, the crunch in oil demand globally.
The COVID-19 health crisis is regarded as a different kind of “shock” to oil markets, with no concrete assessments yet on the extent of financial distress this will bring to the oil industry for months or years to come.
Indications of deeper misery in the oil industry emerged following reports of gross domestic product (GDP) contraction in China, the world’s second biggest economy, and with the projections of the Organization of the Petroleum Exporting Countries (OPEC) that demand will likely tumble by 6.9 million barrels per day this year.
In the Philippines, the enhanced community quarantine (ECQ) in Luzon that kicked off March 17 and extended until April 30, is expected to shrink fuel consumption.
There are no clear indications yet if the government will start easing quarantine measures after April 30, including proposals to partly re-open public transport system in the country.
The oil companies said the lockdown has adversely affected their sales.
Prior to the ECQ, the oil industry was already reeling hard from the government’s imposition of higher excise taxes on fuel products, weighing down their financial performances in the past two years