Oil prices to go up for 8th straight week

At a glance

  • Local pump prices are expected to rise again next week.

  • Gasoline prices will increase by P0.10 to P0.50 per liter.

  • Diesel prices will rise by P0.35 to P0.65 per liter.

  • Kerosene prices will go up by P0.50 to P0.90 per liter.

  • This will be the eighth straight week of price escalations at domestic pumps.

The purchasing power of Filipino motorists will be on another round of assault, as pump prices are expected to rise again at the gasoline stations next week, based on the calculation of the oil companies.

According to the industry players, the price of gasoline will rise by P0.10 to P0.50 per liter; while diesel prices will increase by P0.35 to P0.65 per liter.

For kerosene, which is an essential base for aviation fuel and also a prime commodity for many households, its price will go up by P0.50 to P0.90 per liter.

The next round of adjustment on Tuesday (Aug. 29) will already be the eighth straight week of price escalations at the domestic pumps, an economic scenario that has already been punishing consumers in the span of two months.

The estimated adjustments had been anchored on the Mean of Platts Singapore (MOPS), which reckons the outcome of fuel commodities trading in the Asian market.

Apart from MOPS, the oil companies also integrate other factors, such as foreign exchange rate fluctuations, market premium and biofuel costs in their weekly pricing, hence, the final price adjustments often go higher.

In the initial trading days last week, there were indications of potential rollback for gasoline products, but the rise in prices of that commodity at end-week trading on Friday (August 25), eroded hopes of any price reduction.

A monitoring report of the Department of Energy (DOE) has shown that price swings since the start of the year already logged aggregate increases of P14.50 per liter for gasoline; P8.80 per liter for diesel; and P5.84 per liter for kerosene.

As noted by international experts, the turnaround or maintenance shutdown of some Asian refineries – primarily those in India, had been triggering supply tightening in the region, hence, it has been exerting upward pressure on prices.

Another Asian market that has been under squeeze is Myanmar, primarily on the sanctions enforced by the United States on its jet fuel – and that would cover companies or individuals who will supply fuel to be used for military raids by the junta.

Additionally, reports of crude inventory draws in the United States as well as lower-than-anticipated level of product stocks in some European countries contributed to market forces which ignited global oil prices to tick up.

Concerns of oil inventories provided counterweight to the tone being set by the US Federal Reserve for another round of interest rate hike, as well as targeted resumption of oil exports from the Kurdish region in the Middle East.

For the Philippines, the new round of price hikes will just intensify the call of the public transport sector for fare hikes, which will then precipitate spiraling effect on the costs of basic commodities and a broader impact on the inflation rate.