Petroleum prices will in for considerable increases next week, according to the industry players.
Based on the initial calculation of the oil companies, the price of diesel will go up by P0.50 to P0.60 per liter; and kerosene will climb by P0.60 to P0.70 per liter.
For gasoline products, depending on the swing of market forces, the cost hike may just be a marginal P0.05 to P0.10 per liter. There is a possibility of oil firms opting not to implement this meager price adjustment.
The Philippine oil companies are expected to effect the new prices at the pumps on Tuesday (August 31). The rate will be mainly anchored on cost movements linked to the Mean of Platts Singapore (MOPS), a regional pricing benchmark since most of the industry players are now importers of finished petroleum products.
The anticipated upward adjustments in domestic pump prices next week could be due to hurried recovery of global oil prices as there had been abrupt rise from the previous week’s collapse.
Experts noted that international benchmark Brent crude swung back to $72 per barrel at end of last’s week trading – and that’s a remarkable turnaround from its precipitous slide to $64-$65 per barrel in the second to third week of August.
Market watchers have previously attributed the downtrend in international oil prices to the resurgence of Covid-19 infections because of the Delta variant. However, last week’s price rally had been attributed to the “bullish demand outlook for China” and supply disruptions in the Gulf of Mexico.
It was emphasized that because of a blaze in Mexico’s Ku-Maloob-Zaap offshore platform, about 400,000 barrels per day of oil supply had been suddenly taken out from the market.
Industry experts thus noted that such recent geopolitical incident and the subsequent buoyant market development in China, somehow subdued concerns on the rising coronavirus infections and its impact on world oil demand. Higher demand for petroleum products is also anticipated with the easing of mobility restrictions in the country.
Based on the monitoring of the Department of Energy (DOE), the overall adjustments in pump prices since the start of the year still incurred a net increase of P12.45 per liter for gasoline; P9.35 per liter for diesel; and P7.40 per liter for kerosene.