Brace for new wave of oil price hikes

Published January 9, 2022, 10:10 PM

by Myrna M. Velasco

For the second round this January, Filipino consumers will need to shell out higher budgets for their fuel consumption next week as pump prices are anticipated to go up again, based on the initial calculation of the oil companies.

Oil pumps

According to the industry players, gasoline prices are estimated to go up by P0.70 to P0.80 per liter while diesel prices will have heftier upward adjustment of P0.85 to P0.95 per liter.

For kerosene, which is a base for aviation fuel, price hike has been calculated at the scale of P0.80 to P0.90 per liter, as reckoned from the outcome of trading in the world market last week.

The oil firms will be adjusting their prices on Tuesday, Jan. 11, and that will be reckoned on the cost swings of the Mean of Platts Singapore (MOPS), the pricing barometer adopted by the deregulated downstream oil industry in pricing their commodities at the pumps.

According to the Department of Energy, the new wave of price hikes would still be due to the escalation of world oil prices, and the aggravating factor is the depreciation of the Philippine peso versus the US dollar.

As of Jan. 7 trading, international benchmark Brent crude surged past $81 per barrel again while Dubai crude, which is the pricing yardstick for Asian markets, had been inching very close to $80 per barrel.

Despite the very high rate of infection triggered by the COVID-19 Omicron variant, government leaderships around the world opted not to enforce tight restrictions on mobility, hence, oil demand were still seen ticking up.

Geopolitical factors, such as protests in oil-producing Kazakhstan as well as the political impasse in Libya, had been noted by international experts as contributing elements to the rising prices in the world market.

There are also assumptions that the stagnating production of Russia, being a major ally-producer of the Organization of the Petroleum Exporting Countries (OPEC), has been aggravating supply constraints that in turn have been pushing oil prices higher.

In the Philippines, the struggle of motorists – primarily the public transport sector – is still focused on swaying government to temporarily suspend the imposition of excise taxes on petroleum products.