It will be an abrupt change at petroleum pumps this coming week, as prices of gasoline products are anticipated to go up by P0.60 to P0.70 per liter, based on the initial calculations by industry players.
For diesel, the estimated price increase is P0.10 to P0.20 per liter while kerosene prices could be higher by P0.50 to P0.60 per liter. Oil companies are expected to enforce the cost hikes on Tuesday (September 22), which is their established grind when it comes to pricing adjustments at the domestic pumps.
This week’s price trends will be a complete reverse of the massive rollbacks that the consumers considerably enjoyed in recent days when they filled up their gas tanks.
International benchmark Brent crude climbed back to the level of $43 per barrel last week while Dubai crude as a reference for the Asian market stayed at the softer price range of US$42 per barrel.
For oil firms in the Philippines, the main determinant in pricing adjustment is the Mean of Platts Singapore (MOPS) chiefly because the industry is dominated by fuel importers and the peso-dollar exchange rate.
This year, the downstream oil sector has been among the sectors that suffered financial hemorrhage as lockdowns were enforced not just in the Philippines but in most countries in the world.
The whip of the coronavirus pandemic manifested clearly in the bottom lines of the Philippine oil companies, with the biggest players registering massive losses of P6 billion to P14 billion in the first half.
Global prices crashed to as low as $20 per barrel around April. While prices already inched up to the level of $40 to $45 per barrel in recent months, it is projected that recovery of the sector will come at a very gradual pace.
The aviation sector in particular may take until year 2022 to register demand rebound, given that air travel remains highly restricted especially for non-essential journeys.
In the Asian market, prospects remain unpropitious with sustained prognosis of slow demand recovery, high stock levels and expectations of continued heavy exports from China that may last throughout the year.