Following global price acceleration nearing the $80 per barrel mark, Filipinos will have to brace for hefty pump price hikes next week that are inching close to P2.00 per liter.
Based on oil firms’ calculation, gasoline prices will increase by P1.45 to P1.55 per liter while diesel prices will climb by P1.95 to P2.05 per liter.
The price of kerosene products will also increase significantly by P2.00 to P2.10 per liter, because of higher demand for this commodity — not just for households but also for industries that have been using it as base fuel, including the aviation sector that is now anticipating return to higher travel demand.
The Philippine oil industry players will implement the projected price hikes on Tuesday, Oct. 5), but the Department of Energy (DOE) has appealed for a staggered increases basis to cushion the impact on consumers.
The pricing reference applied by the oil companies on their weekly cost adjustments is Mean of Platts Singapore (MOPS) because most of the players are finished product importers.
As culled from settlements in oil trading last week, the price of international benchmark Brent crude had been wildly gyrating at more than $79 per barrel, while Dubai crude, which is the benchmark for Asian markets, had been at over $72 per barrel.
Supply tightness has already been rearing its ugly head in the oil markets, and one manifestation of that is the deepening energy crisis in the United Kingdom.
The wider re-opening of many economies post-Covid, primarily in countries that already gained significant traction on their vaccination programs, has been triggering supply crunch.
Meantime, market jitters are seen easing if the October 4, 2021 scheduled meeting of the Organization of the Petroleum Exporting Countries and its ally-producers (collectively known as OPEC+) would pivot toward injecting more crude into markets.
Industry experts are anticipating that if the OPEC+ decision will bring in more supply, there is high probability that international oil prices would soften back to the $75 per barrel in the coming weeks.
The Philippines is one of the markets extremely vulnerable to global price shocks because of its heavy dependence on imported oil.