Consumers are keenly looking forward to price rollback at the pumps this week, but the final cost reduction ended up at a disappointing endpoint with just P0.10 per liter price cut for diesel products; and P0.60 per liter for gasoline products.

For kerosene, the price cut was well along expectation at P0.40 per liter, if based on the Mean of Platts Singapore (MOPS) index as culled from the outcome of trading last week.

As of press time, the oil companies that already sent notices on their trimmed prices effective Tuesday (February 13) had been Shell Pilipinas Corporation, Seaoil and Cleanfuel; while their competitor-firms are expected to follow this week’s pricing trends.

According to the oil companies, the lower-than-expected price rollbacks had been due to the niggling risk premium triggered by rerouting of shipping vessels because of the lingering Red Sea skirmish.

The industry players calculated that the freight premium had already surpassed $3.00 per barrel, hence, that has been gobbling up any expected heftier price cuts.

Global oil prices last week had been trending downwards in the initial trading days, but it climbed back to $81 per barrel around Thursday to Friday on fears of new wave of attacks to be launched by the United States against the Houthi militants.

The momentary softening of international prices on the reported ceasefire between the Israel and Palestine forces was eventually replaced with gloom – that was following the former’s rejection of the ‘truce’ offer, hence, oil prices went back to their wild gyration sweep at end-week trading.

With the prolonged Red Sea crisis and the escalating tension in the Middle East, giant shipping vessels, such as Maersk, as well as global banks are already seeing probabilities of ‘high priced regime’ for oil prices throughout 2024, with market premium seen rising to as high as $10 per barrel.

Apart from geopolitical friction, the factor which added up to pricing pressure had been stronger demand of the United States, the world’s biggest oil consumer – and that was on account of its positive economic growth.

For the Philippines, upticks in fuel prices will not just squeeze consumers’ pockets, but it will also precipitate unfavorable impact on the economy – primarily inflationary prices on the cost of basic goods as well as services.