Diesel to rise by more than P1.00/liter next week

Published June 25, 2022, 10:02 AM

by Myrna M. Velasco

Price adjustments at the oil pumps next week will continue for diesel and kerosene, but it could be mixed adjustments for gasoline, based on the calculation of the oil companies.

Industry players estimated that diesel prices will increase by P1.05 to P1.20 per liter while kerosene will go up by P0.10 to P0.20 per liter due to the combined impact of international price swings as well as the falling value of the Philippine peso versus the US dollar,

For gasoline prices, oil firms initially calculated a reduction of P0.05 to P0.10 per liter, but if premium charges will be added, the resulting price will either be increase or there will be no movement in prices by Tuesday, June 28.

The domestic market keenly monitored the movement of international oil prices in last week’s trading, as well as the fluctuation of the foreign exchange rate; wherein the peso hovered just a shy away from P55 to the greenback.

Based on the monitoring of the Department of Energy (DOE), the local currency had devalued by average P1.04 last week to P54.41 versus P53.36 the previous week.

Prior to the next round of adjustment, DOE’s monitoring report showed that price movements since the start of the year still incurred net increases of P44.25 per liter for diesel; P39.65 per liter for kerosene; and P29.50 per liter for gasoline.

In the regional market, gasoline prices had been down by $3.11 per barrel; diesel by $0.69 per barrel; and kerosene by $3.09 per barrel; but the forex devaluation had eaten up what could have been expected as price rollbacks at the domestic pumps next week.

Globally, benchmark Brent crude was almost steady last week at $112 per barrel level; but experts have been projecting continued turbulence in oil markets, hence, there are no certainties that the downtrend in prices will be sustained in the weeks ahead.

The Marcos administration has yet to appoint the next Energy Secretary, but one of the major policies being lobbied this early include fuel cost unbundling or the segregation of cost items being passed on to evoke pricing transparency to the paying consumers.

There are also proposals to revive the Oil Price Stabilization Fund (OPSF) to cushion radical price spikes; as well as the setting up of strategic petroleum reserve (SPR) which the country can draw on for supply in cases of ‘extraordinary events’ in oil markets.