It’s another punishing week in the pockets of motorists as gasoline prices will rise by P0.80 per liter; while the cost of diesel will be hiked by P0.40 per liter, based on pricing advisories sent to the Department of Energy and the media.
Kerosene, which is another commodity in the weekly pricing adjustment triumvirate, will likewise increase by P0.25 per liter.
As of this writing, the first player to advise the energy department on its price increases had been Pilipinas Shell Petroleum Corporation and it was followed by Chevron, Seaoil and Cleanfuel—with all of their cost adjustments effective on Tuesday (June1); while the rest of their industry competitors are anticipated to follow.
Shell, in particular, has notified the energy department that it added in this week’s adjustments the last tranche of its ethanol cost recovery– that is on top of the price increase attributed to the rally of prices in the regional market as anchored on the Mean of Platts Singapore (MOPS).
The oil companies have implemented a three-batch recovery of the P0.80 per liter increase in the price of ethanol, which is a blend to gasoline products at 10-percent by volume.
The industry players emphasized that procurement of locally-produced ethanol had been more expensive in the covered quarter, but they opted to stagger the pass-on of the resulting increase to ease its impact on the consumers’ spending power.
In the global scene, the improving economic data in the United States due to apparent success in its vaccination program, had ignited prices to inch closer again to US$70 per barrel last week. It is worth noting that the US is the world’s biggest oil consumer.
There had been initial apprehensions over supply in the market vis-à-vis recovering demand as more and more countries spring back from the economic distress of the pandemic, but the Organization of the Petroleum Exporting Countries (OPEC) and its ally-producers led by Russia had indicated that they will pump in additional oil into market as needed.
Market experts are also keeping a close watch on the impact that the anticipated lifting of sanctions on Iran, as well as its targeted new nuclear deal with the US, will potentially have on supply and also the potential pressure it may exert on pricing.
For the Asian market, demand prognosis had been dulled because of what remains as increasing rate of Covid-19 infections in various countries – primarily India which is the new epicenter of the pandemic, and then there had been fresh round of lockdowns in Malaysia, Taiwan and also rising infections in Vietnam.