Filipino motorists will bear the financial brunt of big-time price hikes for petroleum commodities this week as the retail costs of diesel and kerosene will go up by P2.05 per liter, as announced by the oil companies.
Gasoline product prices, on the other hand, will also be higher by P1.45 per liter, based on pricing adjustments advised to the media by the oil companies.
As of this writing, the oil industry players that already notified on their price hikes had been Pilipinas Shell Petroleum Corporation, PetroGazz, Cleanfuel, Chevron and Seaoil effective October 5 (Tuesday).
Typically, their competitor-companies will just follow the weekly pricing trend due to the dictates of market forces; that in the process serves as the deciding factor of consumers on whether they will patronize a certain company or brand; or if they will shift to other players.
The price swings at the domestic pumps are anchored on cost movements of the Mean of Platts Singapore (MOPS), which is a pricing reference adopted by oil markets in the Southeast Asian region.
According to industry experts, the hefty price hikes that will torment Filipino consumers in the initial days of October had been due to the drastic rally in prices in the world market that escalated near the $80 per barrel last week.
Prior to this round of price hikes, a monitoring report of the Department of Energy (DOE) showed that price adjustments from January-September this year still incurred a net increase of P15.10 per liter for gasoline; P12.95 per liter for diesel; and P10.65 per liter for kerosene.
In the international market, the Organization of the Petroleum Exporting Countries (OPEC) and its ally-producers are scheduled to re-convene this October 4 – and the general expectation is for them to decide on pumping more oil into markets.
With that anticipated outcome of the OPEC+ meeting, forecasts point to possible softening of prices this week, which in turn may result in cost reductions in the coming days and weeks.
But the overall prognosis for the global oil market is for supply tightness to reign in the coming months, especially so since more countries are now broadening the reopening of their economic activities as they ramp up efforts on post-Covid recovery.