Due to demand softening because of rising Covid-19 infections triggered by the Delta variant, oil prices at Philippine pumps will be on a significant rollback next week, according to the oil industry players.

Based on initial calculation, the price of gasoline may be reduced by P0.80 to P0.90 per liter; and diesel prices could be trimmed by P0.65 to P0.75 per liter; while kerosene could go lower by P0.60 to P0.70 per liter.

The price cuts will be due on Tuesday (August 10) and such will be anchored on swing of prices based on the Mean of Platts Singapore (MOPS), a regional pricing index embraced by the Philippine oil firms on their pricing adjustments.

According to experts, prices have fallen in the world market last week on ‘demand uncertainties’ due to the impact on people’s mobility of the rising coronavirus infections -- and that caused international benchmark Brent crude sliding to $70 per barrel from a high of $75 per barrel the previous week.

Even Dubai crude, which is the pricing reference for Asian oil markets, had slipped at the level of US$69 per barrel in some trading days last week, given that most Asian countries are now pummeled by the Delta variant.

Nevertheless, starting Thursday (August 5) trading, global oil prices started rising again to $71 per barrel level because of new geopolitical tension in the Middle East – primarily the reported ‘rocket firing’ toward Israel from Lebanon’s territory.

Market watchers have indicated that if international prices will continually rise in the forthcoming trading days, then consumers will need to brace for another price hikes again in the succeeding week.

The seesaw in global oil prices this month is being influenced by array of factors –including Delta variant-triggered lockdowns in some countries; the re-emerging geopolitical risks; and what has been perceived as stalled ‘nuclear talks’ between Iran and Western powers, in which a ‘compromise deal’ was earlier expected to have eased sanctions on Tehran’s oil exports.

In the Philippines, a monitoring report of the Department of Energy (DOE) showed that pump price adjustments since the start of the year still posted a net increase of P13.90 per liter for gasoline; P11.10 per liter for diesel; an P9.45 per liter for kerosene.

Apart from renewed rally in world oil prices, the domestic industry players are also monitoring the foreign exchange rate as a factor to be adding pressure on price adjustments in the coming weeks – especially so since the US dollar started climbing back again last week after a very brief tailing off in the initial days of August.