With a ‘mega spike’ of $150 per barrel oil in the world market anticipated in the days ahead, the Philippines is subsequently seen bracing for P100 per liter oil at the domestic petroleum pumps, especially for gasoline products that are now inching closer to P90 per liter.
In a briefing with reporters, Energy Secretary Alfonso G. Cusi indicated that P100 per liter oil will be a ‘possibility’ at the domestic pumps, although he qualified that it will depend “on how it would hit in the world market.”
On Monday, March 7, global oil prices as anchored on international benchmark Brent crude surged to as high as $130 per barrel, $12 per barrel jump from last Friday, March 4 trading. As such, market analysts are now forecasting that the next record high may already breach $150 per barrel and this could happen this week or in the days ahead.
From that one-day drastic climb in prices, it was calculated by industry players that the corresponding cost impacts at Philippine pumps could be price hikes of P8.20 to P8.50 per liter for gasoline products; P12.55 to P12.65 per liter for diesel products; and P11.10 to P11.20 per liter for kerosene products. These adjustments could hit Filipino consumers’ pockets next week if world oil prices will not wane in the next 3 days.
By Tuesday, March 8, prices softened a bit for Brent crude at $127 per barrel while West Texas Intermediate or WTI crude as reference pricing for North American market had been at $122 per barrel and Dubai crude as Asian market benchmark was at a high of $115 per barrel. But that price drop was seen very temporary and could take another round of ferocious rally as the Russia-Ukraine war escalates anew following an interim ceasefire.
If the skyrocketing oil prices in the world market won’t ease in the coming days, it is anticipated that the colossal price adjustments will already drive prices above P90 to P95 per liter for gasoline and more than P80 per liter for diesel products.
Cusi admitted that while the government has been batting for intervention for the regulation of the deregulated downstream oil market, there is not much that the State can do when it comes to cost adjustments because these are subject to pricing volatilities globally.
“You cannot control the price, you can only regulate it to a certain degree - and we are net importer. So the price, this is not under government’s discretion, that is dictated by the world market,” the energy chief argued.
Cusi thus noted that the focus of the government now is to ensure that there will be supply, because the Philippines is also competing with other economies in cornering its share in the pie for oil commodities that could then help hasten the country’s economic rebound from the Cocvid-19 pandemic.
“We have to make sure that we have the supply. We have to compete in the world market to bring that to the country – that’s why we are paying for what is the price in the world market,” the DOE secretary said.
Relative to pricing, Cusi reiterated that what the government can do is to accelerate the distribution of the P5.0 billion subsidy to the public transport sector as well as the P1.1 billion allocation to farmers and fisherfolks because these could cushion spikes in the cost of basic commodities and it could also avert transport fare hikes.
When asked on the proposal of some lawmakers for the declaration of “state of economic emergency”, Cusi opined “I don’t think it is necessary at this point... even if you will declare an economic emergency, what do you do during the economic emergency? So, I wouldn’t say that it is necessary at this point in time.”
He added that as global oil prices continue to gyrate wildly, “the government is doing everything. We’re working together in the economic team - we were there yesterday meeting, discussing...so it’s a total effort of everybody to face the problem so we can wade through this problem.”