Oil prices on another round of hefty rollback

Published August 6, 2022, 9:21 AM

by Myrna M. Velasco

Filipino motorists will experience continued relief in their pockets next week as prices of petroleum commodities at the pumps will be on another around of big-time rollback, according to oil companies.

Based on the outcome of five-day trading in the regional market, oil firms estimated that the price cut for unleaded gasoline products will be at P2.00 to P2.20 per liter while diesel prices will be slashed by P2.10 to P2.30 per liter.

For kerosene product, which is generally used as base for aviation fuel, the calculated price reduction will be at the scale of P2.50 to P2.70 per liter, according to the industry players.

Oil companies will enforce the price cuts on Tuesday, Aug. 9. The price reduction is anchored mainly on the cost swing of the Mean of Platts Singapore (MOPS), the pricing reference being employed in the deregulated downstream oil industry.

Prior to the fresh wave of price downtrends next week, a monitoring report of the Department of Energy (DOE) showed that cost adjustments since the start of the year still log net increases of P32.35 per liter for diesel; P27.30 per liter for kerosene; and P19.65 per liter for gasoline products.

As noted by industry experts, the continued plunge in global oil prices has been ignited by escalated concerns of global economic recession; that in turn has been decimating oil demand among major economies in the world.

For an import-dependent economy like the Philippines, the sustained rollback in fuel prices offer some bit of good news, especially to the penny-pinching consumers who struggle on a daily basis on their commute to work and in sustaining household budgets.

Even the public transport sector of the country is now regaining financial solace, because cheaper prices at the pumps could bring about higher daily earnings that they can bring home to their families.

It could be gleaned that as of end-week trading, the price of international benchmark Brent crude tumbled to $94 per barrel; a major collapse from price swings of $104 to $110 per barrel in the prior week.

Apart from the intensifying fears of economic recession, the other key factor which helped soften prices in the world market had been the decision of the Organization of the Petroleum Exporting Countries (OPEC) to boost production by at least 100,000 barrels per day, which is targeted to be pumped into market by September.

Current market projections portend possible further decline in demand as the world’s two major oil consumers continue to struggle with inflationary pressures and low growth in the case of the US; while China is seen grappling to find fixes on its economic troubles.