Big-time rollback in pump prices due by Tuesday

It’s feeling a lot more like Christmas for consumers, and one of their early gifts will be big-time rollback at the pumps next week, based on the calculation of the oil companies.

According to the industry players, the price of diesel will have sizeable reduction of P1.65 to P2.05 per liter; while gasoline prices will be trimmed by P1.55 to P1.95 per liter.

Additionally, the price of kerosene, which is an essential base for aviation fuel and a key commodity at households and other industries, will be pared by P1.35 to P1.75 per liter.

The price downtrend due on Tuesday (December 12) will still be anchored on the Mean of Platts Singapore (MOPS), which reflects the outcome of finished petroleum product trading in the regional market; but that will be amalgamated with other factors, such as foreign exchange rate and biofuel costs as well as the sway of market forces.

If purely reckoned on MOPS-calculated adjustments, the price cuts had been estimated at P2.043 per liter for diesel; P1.915 per liter for gasoline; and P1.623 per liter for kerosene.

Prior to the forthcoming round of price adjustments, a monitoring report of the Department of Energy (DOE) has shown that cost movements since the start of the year were still at net increases of P12.60 per liter for gasoline; P5.70 per liter for diesel and P1.94 per liter for kerosene.

Global oil prices crashed anew last week due to demand concerns on account of slowdown in economic growths in major countries, hence, the paramount price downswing anticipated at the domestic pumps.

International benchmark Brent crude, in particular, nosedived to $74 per barrel last week, as the targeted voluntary production cut announced recently by the Organization of the Petroleum Exporting Countries and ally-producers (OPEC+) failed to rouse market sentiments.

As emphasized by international experts, it will take better developments from the macroeconomic sphere or new disruptive geopolitical events for prices to track fresh round of upticks, but these are not seen coming on the horizon in the remaining weeks of the year.

The Paris-based International Energy Agency (IEA) is forecasting increase in demand by next year, but it is also looking at possibilities that markets will be well supplied with oil, hence, there are no definitive pathway yet how prices will behave, especially in the initial months of 2024.

For import-dependent economy like the Philippines, downward movement in oil prices will always come off as a positive development because this will bring relief not just in the pockets of consumers, but also on its inflationary impact to basic commodities and services.