Oil prices on another round of rollback next week

Filipino consumers will have another streak of luck next week on their fuel budgets as prices will be on another round of rollback, albeit modest, with diesel products anticipated to have heftier cost reduction of P1.80 to P2.10 per liter.

Additionally, oil firms calculated price cut of P0.40 to P0.60 per liter for 92RON gasoline and P0.70 to P0.90 per liter for 95RON gasoline; while kerosene products will have cost downtrend of P1.15 to P1.35 per liter.

The industry players will implement the adjustments on Tuesday, July 26, in keeping with the routine of cost swings being enforced in the deregulated downstream oil industry – and it will be mainly anchored on the Mean of Platts Singapore (MOPS) index.

So far, the foreign exchange rate had not been exerting that much pressure on fuel prices on this fresh wave of price movements because the Philippine peso’s value had been relatively steady versus the US dollar.

Prior to next week’s cost movements, a monitoring report of the Department of Energy (DOE) showed that fuel prices still incurred net increases at the scale of P34.80 per liter for diesel; P29.35 per liter for kerosene; and P19.30 per liter for gasoline.

In the world market, after the collapse of prices below $100 per barrel in the past week, international benchmark Brent crude regained its strength as it inched up anew to $104-$105 per barrel as of Friday (July 22).

There had been initial softening of prices in the global market last week with indications from Saudi Arabia, the biggest oil producer of the world, that it will be injecting additional 100 million barrels of oil into export markets.

With the series of price rollbacks in recent weeks, Filipino consumers had so far been spared from the torment of incessantly rising pump prices – primarily on fears of domestic oil prices hitting P100 per liter.

At this stage, markets are still getting jittery at forecasts of economic recession – that on a wide-ranging basis could further help soften global oil prices due to highly probable demand crunch. In turn, this will somehow be beneficial to an oil import-dependent economy like the Philippines.

The new leadership of the government has yet to navigate its comprehensive policy response to address highly volatile oil prices, including the need for long-term agenda for energy security.

Players in the industry are already prompting the energy department to push for fresh round of oil and gas exploration activities in the country – as any commercial find for gas or oil could help ease the country’s predicament of relentless oil price spikes reigning in the global market.