As July enters its initial week, fuel budgets are not exactly coming in favorable to the pockets of consumers as oil prices are expected to climb again this week, especially for gasoline products, although a breather is due for kerosene products.
As culled from the initial calculation of the oil companies, prices will rise by P0.55 to P0.65 per liter for regular gasoline products; while premium gasoline will incur higher adjustments of P1.00 to P1.10 per liter.
Conversely, diesel prices will likely remain at current prices or will just have very slight increase of P0.05 to 0.10 per liter; while kerosene may also be steady or will have a rollback of P0.05 to P0.10 per liter.
The oil companies will be implementing the anticipated fresh round of price adjustments by Tuesday (July 6), in line with the cost movement routine that the deregulated downstream oil sector had already been accustomed to.
Next week’s mixed price swings will follow last month’s five-week cycle of pernicious price hikes; and experts have been projecting that upward trends may continue in the coming weeks and months.
The industry players have cited sustained rally in global oil prices; as well as the escalating value of the US dollar versus the local currency as among the factors precipitating upward adjustments in domestic pump prices.
Experts noted that the lack of firm decision from the Organization of the Petroleum Exporting Countries (OPEC) and its ally-producers on prospects of raising production during their July1 meeting -- on account of reported disagreements over baseline of output quotas -- had not so far helped in easing the oil market’s “overheating” state.
Last week, the greenback had been consistently edging higher and only retreated slightly as of Friday (July 2) trading, following the release of data on non-farm payrolls (NFP) of the United States; but what provided a counterweight to that has been the resurgence of rising Covid-19 infections in various parts of the world because of the more deadly Delta variant.
For a highly oil import-dependent economy like the Philippines, the double whammy of rising value of the US dollar and surges in global oil prices could trigger pernicious jolt on the spending power of its consumers as they will be paying more when they fill up their vehicles at the pumps.
Beyond that, the escalating prices of oil commodities also exert inflationary pressure on the cost of basic goods as well as on transportation fares, hence, these could further encumber household budgets.
There had been consistent forecasts of demand rise following the wider reopening of economic activities in ‘super power countries’, but the forbidding threat of Covid’s Delta variant may also slow down economic rebound especially in jurisdictions that have slower pace of vaccinations.