Big-time oil price hikes for 4th time this month

Published January 22, 2022, 9:39 AM

by Myrna M. Velasco

The continued rally in prices in the world market will cause another hole in Filipino consumers’ pockets as oil prices will be on big-time hike next week, the fourth time this month.

According to the estimates of the oil companies, gasoline prices will be rising by P1.45 to P1.55 per liter while pump costs of diesel products will increase by P1.80 to P1.90 per liter.

The retail price of kerosene products, known base for aviation fuel, will also go up by P1.55 to P1.65 per liter, since even the rising infection cases due to the Omicron variant of the COVID-19 had not deterred mobility of the global population.

The price adjustments at the domestic petroleum pumps will be due on Tues., Jan. 25, and it will be primarily reckoned on the Mean of Platts Singapore (MOPS), the widely adopted pricing reference of the deregulated downstream oil sector.

This is already the fourth week of hefty price hikes just for the month of January. There are no clear indications yet that consumers could expect a reverse scenario in the coming weeks.

Last week, global benchmark Brent crude surged close to $88 per barrel, on continued concern over supply flow into market, with experts noting the dwindling spare capacity of the Organization of the Petroleum Exporting Countries and ally-producers (OPEC+), including that of Russia.

There are also aggravating geopolitical factors that have been assaulting market fundamentals, including a recent Ceyhan pipeline explosion in Turkey that temporarily disturbed flow of Kurdish crude supply into the Mediterranean.

Given the incessant four-week rise in international oil prices, investment banks like Goldman Sachs and Morgan Stanley came out with recent projections that oil prices may hit the $100 per barrel mark this year.

To date, industry watchers are keeping track of the possible impact of the 400,000 barrels per day supply addition that the OPEC+ will be injecting into market early next month – whether or not that would help in easing global oil prices.

In the Philippine market, a monitoring report of the Department of Energy (DOE) showed that gasoline prices have already gone up by aggregate P3.50 per liter in the past three weeks; diesel products by P5.30 per liter; and kerosene by P5.05 per liter.

Upticks in domestic prices are influenced not just by rising global oil prices but also of the depreciating value of the Philippine peso versus the US dollar.