Oil firms implemented smaller P0.65 per liter this week, short of P0.10 to P0.15 per liter compared to their earlier estimates of P0.75 to P0.85 per liter set off by the industry players, prompting he Department of Energy (DOE) to seek explanation from the oil companies.

For diesel prices, that had been reduced by P0.70 per liter; while kerosene prices were on a rollback of P0.75 per liter – and such downward adjustments were in accordance with previously given calculations based on the Mean of Platts Singapore (MOPS).

As of press time, the oil firms that already sent notices on their pricing adjustments include Pilipinas Shell Petroleum Corporation, PetroGazz, Cleanfuel, Seaoil, PTT Philippines and Chevron effective on Tuesday (August 10).

Pilipinas Shell explained that its smaller rollback was due to “higher ethanol prices” that accrued in the last quarter and will only be passed on at retail pumps this month.

The oil firm emphasized that in this round of adjustment, the rollback for gasoline products should have been at heftier P0.75 per liter, but it incorporated at least P0.10 per liter hike in ethanol prices, so the resulting price cut was just set at P0.65 per liter.

Pilipinas Shell said it is passing on the ethanol cost adjustments on a staggered basis -- and it would still have remaining price adjustment recovery of P0.50 per liter that it will reflect in the next 2-3 more rounds of pump price adjustments.

The decline in pump prices this week had been due to the lowering of oil demand, because even ‘super power’ countries like the United States and China, are being pummeled by the resurgence of Covid-19 infections triggered by the more deadly Delta variant.

Primarily in the Asian market, experts are raising concerns that the new wave of demand curbs because of the pandemic may slow demand recovery – and that’s fundamentally a reverse of earlier sentiment of optimism in oil markets.

As of Monday, August 20, international Brent crude skidded again to the level of US$69 per barrel from US$71 per barrel last Friday, as market watchers raise alarm over possible erosion of economic gains posted in recent months.

The other influencing factor to oil prices that’s being keenly watched in the market is the value of the US dollar – primarily versus the currencies of countries that are heavily importing their oil requirements, which is the case for the Philippines.