Oil firms implement leaner price rollback

Published April 4, 2022, 2:58 PM

by Myrna M. Velasco

The country’s oil companies are implementing lower-than-calculated price rollbacks this week, but did not provide detailed explanation, the Department of Energy said.

Effective Tuesday, April 5, the price cut for gasoline products would be P2.30 per liter, diesel would be P1.85 per liter, while kerosene prices will go down by P1.65 per liter.

As of this writing, oil companies that already advised on their price rollbacks include Pilipinas Shell Petroleum Corporation, Cleanfuel, PetroGazz, Seaoil and Chevron, while the rest of their competitors are anticipated to follow.

The price cuts have been leaner by P0.30 to P0.50 per liter versus estimates if referenced on last week’s cost swings of the Mean of Platts Singapore (MOPS), but the oil firms are not giving explanation on the estimated “cost difference” in the pricing adjustments at the pumps.

Since the massive price swings have been reigning in markets, it becomes a weekly puzzle to consumers why oil firms are implementing bigger-than-projected price hikes but are implementing lower-than-calculated when it comes to price rollbacks.

Nevertheless, because of a pending case on the DOE’s fuel cost unbundling policy, oil industry players said they are not in a position to explain all the cost components being factored in their weekly pricing adjustments.

The DOE also argued that their hands are tied when it comes to compelling the oil companies to be transparent in their pricing.

Given the relentlessly surging prices in the world market, the United States opted to withdraw from its strategic petroleum reserve (SPR) that helped ease prices in last week’s trading.

Additionally, member-countries of the International Energy Agency (IEA) decided to release from their respective oil stockpiles as their contribution to stabilizing global oil prices.

Overall though, the prognosis of global experts had been that the worst is not over yet in this lingering oil crisis and that prices may rise again in the coming weeks and months.

The Philippines is highly vulnerable to cost movements at the pumps because it has been importing more than 90-percent of its petroleum requirements from the world market, hence, oil of $100 per barrel or higher magnitude will always be a bad news for the domestic market.