Hefty oil price hikes will greet consumers at the domestic pumps in the New Year, as the cost of fuel commodities will rise by Tuesday, Jan. 3, according to the oil companies.
Based on the calculation of the industry players, the initial salvo of price escalations for 2023 had been estimated at P2.45 to P2.85 per liter for gasoline; and P2.00 to P2.40 per liter for diesel products.
Additionally, as airline travels are on their sustained surge - especially during the holiday season - the price of kerosene, which is the base for aviation fuel, is also expected to rise by P2.75 to P3.05 per liter.
The Philippine oil companies will be implementing the cost adjustments based on the swing of regional trading prices as indexed on the Mean of Platts Singapore (MOPS), which in turn follows the fluctuation of prices in world markets.
Conversely, the price of liquefied petroleum gas (LPG) is expected to incur price rollback ranging from P3.00 to P3.50 per kilogram (kg) and this will be imposed at retail outlets starting Sunday, Jan 1.
As culled from the monitoring report of the Department of Energy, overall pump price adjustments for 2022 logged net increases of P27.30 per liter for diesel; P14.90 per liter for gasoline; and P21.30 per liter for kerosene products.
After an exceptional plunge to the $75-$76 per barrel territory in prior weeks, international benchmark Brent crude swiftly climbed back close to $86 per barrel as of Friday (December 30) trading following disruptive events that affected supply-demand fundamentals in oil markets.
The reopening of China as well as the recent wallop of winter storm across the United States had been regarded as the major factors which triggered supply tightening, hence, they exerted upward pressure on prices.
According to oil market experts, the uptick in prices which mostly reigned at the pumps in 2022 may well continue into the coming year with demand seen continually rising despite niggling forecasts of economic recession.
Market watchers emphasized that the drag on the Russia-Ukraine war will continue to influence price movements in 2023; and the added element will be the track of decisions to be pursued by the Organization of the Petroleum Exporting Countries and its ally-producers (collectively known as OPEC+) when it comes to enforcement of production quotas.
Another major factor that will have a sway on oil prices will be the tightening of monetary policies that will be adopted by the central banks of major economies, primarily to tame inflationary pressures on basic commodities.