Motorists to brace for higher oil prices next week

Published May 29, 2021, 11:46 AM

by Myrna M. Velasco

Filipino motorists will need to tighten their financial belts further, as pump prices are anticipated to go up again next week, according to oil companies.

Based on initial computation, oil firms said the price of gasoline could increase by P0.60 to P0.70 per liter; diesel prices by P0.35 to P0.45 per liter; and kerosene by P0.25 to P0.35 per liter.

Beyond the price adjustment reckoned from the weekly trading outcome in the regional market as indexed on the Mean of Platts Singapore (MOPS), oil firms are still recovering a fraction of the cost hikes in the biofuel blend of diesel and gasoline products.

For gasoline in particular, the quarterly pricing adjustment had been calculated at P0.80 per liter; but the first two rounds had already been passed on by the oil firms in recent price increases; hence, the last batch may still be reflected in pump price adjustments next week.

Oil firms normally effect their weekly price increase every Tuesday, which is already the routine that the deregulated downstream oil industry had embraced when it comes to price swings at the pumps.

In the up-and-down cost movement for fuel products since the start of the year, a monitoring report of the Department of Energy (DOE) showed that there was still a net increase of P8.50 per liter for gasoline products; P7.20 per liter for diesel and P5.85 per liter for kerosene.

According to experts, there was an overall rally in oil prices in the world market last week because of robust US economic data and expectations of demand rebound because of the return to ‘normalcy’ by some countries that have already gained traction on their Covid-19 inoculation programs.

In fact, international benchmark Brent crude started flirting again within the US$70 per barrel level last week on initial concerns over supply; and that was a price scale that first manifested in early March this year.

Beyond those factors, market watchers are likewise continuously keeping track of the potential market impact of the lifting of sanctions against Iran once a new nuclear agreement with the United States will be sealed.

And given the anticipated uptick on oil demand as more countries rev up for wider economic reopening as well as the resumption of travel season in the US and European countries, there are also expectations that oil prices may continue to climb in the coming weeks and months.