Given renewed rally in global oil prices, Filipino consumers will brace again for substantial hike in pump prices in the first round of fuel cost adjustment this month.
Based on calculations by oil companies, prices of diesel products could rise by P0.95 to P1.05 per liter, kerosene product prices by P0.80 to P0.90 per liter, while gasoline with relatively leaner upward price adjustments of P0.45 to P0.55 per liter. Oil companies will implement the price upswings on Tuesday (September 7), based on the routine being employed by the deregulated downstream oil industry.
In recent weeks, oil companies have been raising prices not just based on the movements of Mean of Platts Singapore (MOPS) indices, but also passing on costs relating to the biofuel blend of petroleum products as well as higher freight fees.
The pummeling of hurricane Ida in the United States had been the main factor that triggered upticks in global oil prices – primarily due to the disruption of supply following damages sustained by offshore platforms and flooded refineries.
Given such developments, the US Department of Energy on Friday (September 3) has authorized the release of 300,000 barrels of crude from its Strategic Petroleum Reserve (SPR), so it can ease supply worries.
Extreme weather events, such as hurricanes, have been seen among those factors that could adversely impact flow of supply into markets; and could subsequently set off spikes in oil prices.
Last week’s blustery weather that hammered several parts of the US provided a counterweight to drop in prices in recent weeks following demand slowdown because of the devastation of Covid’s Delta variant in various parts of the world.
On those periods, international benchmark Brent crude have eased to the level of $64 to $65 per barrel, but market watchers have seen that radically escalating back to more than $72 per barrel last week.
The West Texas Intermediate (WTI) crude, which is the market pricing reference for the storm-distressed United States, also hit a high of US$69 per barrel as of end-trading last week.
For the Philippine market, the impact of geopolitical events as well as weather conditions in other parts of the world, will have spillover effect on its pump prices because of the country’s very heavily reliance on oil product imports.
Based on a monitoring report of the Department of Energy (DOE), cumulative price adjustments since the start of the year still logged a net increase of P12.85 per liter for gasoline; P9.95 per liter for diesel; and P8.10 per liter for kerosene. ###