By Myrna M. Velasco
In a new wave of big-time cost hikes, the price of gasoline products would go up by P1.75 per liter at domestic pumps; and diesel will climb by P1.10 per liter.
The price of kerosene products will also swing higher by P1.00 per liter in this week’s price adjustments that will take effect Tuesday (June 9).
As of this writing, the oil companies that already sent notices on their price hikes include Pilipinas Shell Petroleum Corporation, PetroGazz, Seaoil, Cleanfuel, PTT Philippines and Chevron; while the rest of the industry players are anticipated to go along with the price adjustments trend set by competitors.
Beyond the hefty price hikes this week due to the escalation of prices in the world market, other oil companies are also expected to adjust prices by a scale of about P1.00 per liter because of the increased 10-percent import duty on crude and finished petroleum products. (Myrna M. Velasco)
Global prices are still anticipated to be on upswing in the succeeding trading days following the outcome of weekend meeting between the Organization of the Petroleum Exporting Countries (OPEC) and its ally-producers led by Russia wherein they extended production cuts by another month.
Their decision entails that output will have to be continually trimmed by 9.7 million barrels day, which is equivalent to 10-percent of global oil production on normal conditions.
That was a follow-through to the April agreement that the international oil producers had come up with to lift prices when it collapsed below US$20 per barrel because of the coronavirus-linked lockdowns of many countries that then subsequently restricted people’s movement and practically stymied economic activities.
In the new deal of the OPEC+ alliance, it was agreed that the producers that cannot conform to the enforced cuts shall agree to the option of adjusting their productions by July, August and September.
OPEC noted in a statement that “in order to observe the fair, timely and equitable implementation (of the agreement), the Joint Ministerial Monitoring Committee was requested to closely review the general energy market conditions and related factors, oil production levels and conformity levels with the DoC (declaration of cooperation).”
For the Philippine market, the impact of rising oil prices comes as double-edged sword – that while it will help prop revenue stream of the oil companies, it will in contrast put heavier burden on the pockets of consumers.
The country’s oil industry players generally reported sheared bottom lines in the first three months of the year and this is seen sustained in the second quarter; but with the gradual reopening of the economy coupled with escalating prices, it is expected that they will recover on financial performance through the remaining months of the year.