Heftier oil price cut expected next week

Published October 31, 2020, 9:38 AM

by Myrna M. Velasco

Consumers’ pockets will experience heftier cash relief next week as oil prices are anticipated to be on a substantial rollback of P0.75 to P0.90 per liter for gasoline; and P0.80 to P0.90 per liter for diesel.

MB file photo. (Mark Balmores)

For kerosene, the price of this commodity is also expected for a reduction of P0.65 to P0.75 per liter, based on the initial calculation of the oil firms.

Industry players will be implementing these price cuts by Tuesday (November 3); although the dictates of competition may prompt other oil firms to enforce rollbacks ahead of their company rivals to corner patronage of consumers.

The price change scene at the domestic pumps is in contrast to what’s happening with the price of liquefied petroleum gas (LPG), a product commonly used in households for cooking, which is rising by P3.20 per kilogram this November.

From the leaner price reductions implemented last week, the Department of Energy (DOE) logged that the total year-to-date adjustments in pump prices had been a net decrease of P4.67 per liter for gasoline; P10.26 per liter for diesel; and P13.59 per liter for kerosene.

As culled from the energy department’s monitoring, prices have been softening in the Asian market because of sustained low demand; while most refineries are also seen increasing their runs next month following completion of maintenance works in their facilities this October.

Globally, what is being watched closely is the ramp up in production of Libya; with experts noting that the more barrels it has been injecting into market could “disrupt the market rebalancing strategy” being pushed by the Organization of the Petroleum Countries (OPEC) and its ally-producers.

To note, the OPEC+ alliance has been requiring stricter compliance on the agreed production cuts until December this year, so sagging oil prices could be lifted.

“Libya’s additional crude could change the story back to oversupply concerns as crude demand outlook weakens, as the world continues on restrictive measures and lockdowns to contain Covid-19,” the DOE monitoring report has stated.

As the Philippines is highly import-dependent market, supply-demand shift developments in the international market could impact on the swing of prices being reflected at the pumps on a weekly basis.

 
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