As global oil prices crashed, Filipino consumers can look forward to big-time rollback in pump prices at the domestic pumps by next week, based on the calculation of the oil companies.

According to the industry players, the price of gasoline products will have the heftiest price cut within the range of P2.75 to P3.25 per liter; while the price of diesel will be trimmed by significant P2.35 to P2.75 per liter.

Kerosene, which is an equally vital commodity for households and key industries like aviation, will have significant reduction of P2.55 to P2.95 per liter.

The oil firms will be implementing the price rollback on Tuesday (October 10), being the weekly pricing adjustment routine of the deregulated downstream oil industry; and it will be anchored on the Mean of Platts Singapore (MOPS), which is the index of oil trading outcome in the Asian region.

The actual calculations of price reduction based on MOPS had been P3.24 per liter for gasoline; P2.65 per liter for diesel and P2.974 per liter for kerosene products, but the industry players typically factor in other cost components like the movement of the foreign exchange (forex) rate, market premium as well as biofuel costs, hence, the final price cuts at the pumps could be leaner.

Prior to the next round of price adjustments, a monitoring report of the Department of Energy (DOE) has shown that price swings since the start of the year still logged aggregate increases of P15.30 per liter for gasoline, P13.80 per liter for diesel and P8.94 per liter for kerosene.

This is already the third week in a series that domestic pump prices have been tracking downtrend; although the financial relief that the consumers have been enjoying now followed a punishing 11-week of price hikes from July until the third week of September.

In the world market, prices have plummeted by roughly $10 per barrel in last week’s trading – with international benchmark Brent crude descending rapidly to $84 per barrel scale from the prior week’s $94 to $95 per barrel level.

The nosedive in international oil prices had been mainly precipitated by bonds selloff and steep drop in gasoline demand of the US market, which is the world’s biggest oil consumer, and that partly ignited a subdued market sentiment by the start of 2024.

The decision of Saudi Arabia to keep its production cut of 1.0 million barrels per day until the end of 2023 was not able to counter recent developments in the US market, thus, overall global prices still tumbled significantly.

For the Philippine market, the price cuts will be highly beneficial not just to the transport sector but also in easing the country’s inflation rate, primarily its spiraling impact on the cost of basic commodities and services.