Pump prices are calculated to be on another round of heavier increases next week, with some fuel products rising by as much as P1.25 to P1.30 per liter.
Based on the estimates of the oil companies, gasoline prices will have the heftiest price hike next week in the range of P1.25 to P1.30 per liter; while diesel prices may rise by P0.90 to P0.95 per liter.
Kerosene, which is the base for aviation fuel and a vital commodity for households and some industries, will also have enormous upward adjustment of P1.00 to P1.10 per liter.
This is already the third time in a row this month that pump prices have been tremendously escalating; as rally in prices in the world market have turned to be a relatively steady fixture in recent trading weeks.
In the Philippine market, the value of the US dollar is also being watched closely given developments this week that it has already been rising versus the local currency – and that too may affect oil prices in the coming weeks.
Another concerning precept for the domestic oil market will be the eventual spiraling impact of the incessant oil price hikes to the costs of basic commodities, which does not herald positive news because Filipinos are already racked with financial pain on their eroding purchasing power.
Based on the monitoring of the Department of Energy (DOE), pump prices in the Philippine market had already climbed by aggregate P4.00 per liter for gasoline products since the start of the year; diesel had been higher by P3.90 per liter; and kerosene products had been up by P3.35 per liter.
In the Oil Market Report of the Paris-headquartered International Energy Agency (IEA) issued last February 11, it already raised alarm bells that ‘tightening of supply’ will likely grip oil markets this year, hence, consumers may need to brace for interminable upticks in prices in the coming weeks and months.
As culled from IEA’s forecasts, demand for oil globally may climb by 5.4 million barrels per day in 2021, reaching a high of 96.4 million barrels per day. It noted that the increase will account for roughly 60-percent of volumes lost at the height of the pandemic last year.
And as the rollout of Covid-19 vaccines gains momentum in many countries around the world, it is seen that the next major factor that could influence prices globally would be the return of major markets to their ‘close to normal’ driving season, especially in the case of the United States, which is the world’s biggest oil consumer.
Additionally, the maintenance shutdown of many refineries in the Asian region within the spring to summer period could also trigger rise in prices in the coming months.