Oil firms implement higher price hikes

Published June 27, 2022, 1:35 PM

by Myrna M. Velasco

This week’s adjustment in pump prices have been way higher than initially-calculated due to market premiums and hike in freight costs, according to the Department of Energy.

Oil companies have implemented higher increases of P1.65 per liter for diesel and P0.10 per liter for kerosene, effective Tuesday, June 28. Even the previously-estimated rollback in gasoline products had instead resulted in increase of P0.50 per liter.

The energy department indicated that when it asked the industry players to explain the heftier cost adjustments implemented, they justified that there had been additional costs relating to escalation in freight and market premiums – and these were in addition to the price swings anchored on the Mean of Platts Singapore (MOPS) index.

As of this writing, the oil companies that already announced their price hikes include Pilipinas Shell Petroleum Corporation, Cleanfuel, Seaoil and Chevron; while the rest of the industry players are anticipated to follow.

Another major factor that triggered uptick in prices this week was the devaluation of the Philippine peso versus the US dollar – as the greenback already touched close to P55 last Friday (June 24).

Apart from fuel commodities at the pumps, Filipino households may also brace for prospective upward adjustment in liquefied petroleum gas (LPG) which will be implemented by Friday (July 1) – and that will add to the financial torment that the consumers will need to suffer from in the days ahead.

As of Monday, June 27 trading, international benchmark Brent crude was on another round of rally at $113 per barrel, manifesting then that the ‘era of high-priced oil’ will not be ending soon.

For the Philippine market, transition in government leadership will happen this June 30. Nevertheless, there are no definitive announcements yet on the energy policies of the Marcos administration – including those on incessantly rising oil prices; as well as the impact of swelling gas and coal prices on electricity rates.

Last week, the official pronouncement given by incoming President Ferdinand Marcos Jr. is that the government will not heed calls on the suspension of excise taxes for petroleum products. Alternatively, the policy approach will be to continue extending targeted subsidies to critical sectors, especially the public utility vehicle (PUV) drivers.

There are also recommendations for the institutionalization of fuel price unbundling policy so the consumers will be properly apprised of the cost items they have been paying for at the pumps – and that shall be done through a legislation that will be passed by Congress.