Motorists using diesel fuel on their vehicles will experience significant financial relief this week as the price of this commodity had been rolled back by P1.20 per liter while gasoline price reduction was lower-than-expected at P0.85 per liter.
The price of kerosene, which is a base fuel for the aviation sector, had also been trimmed by substantial P1.30 per liter due to softening of prices in the world market.
According to industry sources, the leaner-than-expected price cut for gasoline had been due to “increase in import premiums that is related to freight and refining costs.”
As of this writing, the oil companies that already sent notices on their price rollbacks had been Pilipinas Shell Petroleum Corporation, Cleanfuel, Seaoil, Chevron, PetroGazz and Total effective on Tuesday (November 22).
The routine of the other industry players is to match the price adjustments implemented by their competitors, as they regard such as ‘the pull of competitive forces’ in the deregulated downstream oil sector; and their pricing reference is anchored on the Mean of Platts Singapore (MOPS).
The pricing structure of the deregulated downstream oil sector is generally “a puzzle’ even to government policymakers, hence, the Department of Energy (DOE) has been pushing for “fuel cost unbundling” so the oil companies could be held accountable for transparent pricing on petroleum commodities being retailed at their pumps.
A pending bill has been lodged in Congress to amend the Downstream Oil Industry Deregulation Act or Republic Act 8479, but since deliberations may already be overrun by the election period, a re-filing of the measure might be necessary in the next Congress.
Based on the projection of global experts, the abated price surges in the world market may just be temporary because that was just hinged on the commitment of the United States and China to inject more oil into markets from their respective strategic petroleum reserves.
The seeming reluctance of the Organization of the Petroleum Exporting Countries and its ally-producers (collectively known as OPEC+) had triggered incessant price spikes in the past two months; hence, that prompted the US and China, as the world’s major oil consumers, to take it upon themselves to help ease international oil prices.
In the Philippines, the series of price rollbacks in the past three weeks had been a “most welcome development”, chiefly to calm various sectors of the economy that were thrown into ‘turbulent ride’ by the skyrocketing oil prices.
The downtrend in global oil prices may also spare the Philippine government from suspending the imposition of excise taxes on petroleum products, as that could have been a counter-productive move, especially on revenue generation that the country would need so badly for its post-pandemic economic recovery.