Massive oil price hikes to squeeze consumers’ pockets anew

Gasoline price increase inching close to P2.00/liter

BY MYRNA M. VELASCO

Feb 16, 2024 08:12 AM

  

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AT A GLANCE

• On the calculation of the industry players, gasoline prices will rise by P1.40 to P1.90 per liter, diesel to escalate by P1.20 to P1.60 per liter; and kerosene prices will go up by P1.20 to P1.60 per liter.

• If based solely on price movements of the Mean of Platts Singapore (MOPS) index, the quantified price hikes from the outcome of four-day trading had been: P1.421 per liter for gasoline products; then P1.126 per liter for diesel; and kerosene products by P1.292 per liter.

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Huge cash will be burned at the pumps next week, as oil products are anticipated to be on hefty price hikes again by Tuesday (February 20), according to the estimates of the oil companies.

On the calculation of the industry players, gasoline prices will rise by P1.40 to P1.90 per liter, while diesel prices will also escalate by P1.20 to P1.60 per liter.

Kerosene, which is the other commodity in the weekly price swings and an essential base for aviation fuel, will also tick up by P1.20 to P1.60 per liter.

If based solely on price movements of the Mean of Platts Singapore (MOPS) index, the quantified price hikes from the outcome of four-day trading had been: P1.421 per liter for gasoline products; then P1.126 per liter for diesel; and kerosene products by P1.292 per liter.

The final price adjustments will be reckoned after end-week trading on Friday (February 16), but the oil firms indicated that the scenario of elevated prices cannot be reversed anymore.

As the global price compass swung above $82 per barrel in recent days for international benchmark Brent crude, last week’s marginal rollback completely took a reverse turn.

Industry experts noted that the new surge in prices can still be attributed to the raging war in the Middle East with the uncertainties getting more complicated following an impasse on an earlier ceasefire plan between the Israeli and Palestine forces – and the aggravating factor to that is the Red Sea friction which has been whipping up risk premium for oil commodities to stride above $3.00 per barrel.

 Beyond geopolitical events soaring to boiling points, the other factors which precipitated soar in prices had been forecast of trimmed production growth in non-OPEC countries, primarily in Russia and the United States; while the Organization of the Petroleum Exporting Countries (OPEC) had kept demand growth projection unchanged for 2024-2025.

Saudi Arabia, which is the world’s biggest oil producer, similarly indicated plans to curb output to 12 million barrels per day level, as it is opting for higher capital infusion to renewables as part of its energy transition investment trajectory.

As emphasized by industry watchers, these global energy development ripples had dominated market sentiments last week; that even the higher-than-expected inflation figures in the US as well as reports of its inventory buildup had not done much to tame spiral in prices. 

Diesel prices cut by P1.85/liter; gasoline by P1.60 per liter

BY MYRNA M. VELASCO

Dec 11, 2023 02:09 PM

  

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AT A GLANCE

• Reflecting these lower prices at the pumps will come as a bit of good news to Filipino consumers – especially in this stretch of the holiday season when most are on their shopping rush, or on constant drive and commute to catch-up meetings, parties and other gatherings.

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Santa’s slick surprise will also manifest at the oil pumps this week as the price of diesel products will be on rollback by a significant P1.85 per liter; while gasoline prices will be trimmed by P1.60 per liter, based on the price adjustment announcements of the oil companies.

The industry players similarly advised that the price of kerosene, which is an essential base for aviation fuel and an important commodity for many households, will be reduced by P1.40 per liter.

As of this writing, the oil firms that already sent notices on their price cuts effective Tuesday (December 12) had been Shell Pilipinas Corporation, Chevron, Seaoil, Cleanfuel, PTT Philippines, PetroGazz and Jetti Petroleum; while their rival firms are anticipated to match this week’s newly enforced pricing trends. 

The oil firms implemented the downswing in prices based on cost movements anchored on the Mean of Platts Singapore (MOPS) index; as well as other factors affecting prices – such as foreign exchange rate, market premium, biofuel costs as well as the sweep of competitive pressure on prices at the domestic downstream oil industry.

Reflecting these lower prices at the pumps will come as a bit of good news to Filipino consumers – especially in this stretch of the holiday season when most are on their shopping rush, or on constant drive and commute to catch-up meetings, parties and other gatherings.

The recent incessant impact of high oil prices on the country’s inflation rate will also be eased; and this will similarly keep consumers away from the typical spiraling effect of surging fuel prices on the cost of basic commodities and services.

In the world market, industry experts noted that persisting concerns of lower-than-expected economic growths in major economies had been precipitating overall downtrend in oil prices. 

In fact, even the recent pronouncement of the Organization of the Petroleum Exporting Countries and ally-producers (OPEC+) on voluntary production cutback had not been given weight at market sentiments when it comes to the recent swing of international prices.

According to industry watchers, the era of lower prices may continue in the remaining days of the year if there are no major geopolitical events that could send markets into fresh round of jitters.

As of Monday (December 11) trading, international benchmark Brent crude just edged up slightly to $76 per barrel from last week’s more than $75 per barrel price level. 

Heftier rollback in diesel, kerosene expected next week

BY MYRNA M. VELASCO

Nov 4, 2023 09:30 AM

  

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AT A GLANCE

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Happy driving days will continue for Filipino consumers next week as oil prices will continue to track downtrend at the domestic pumps, according to the calculation of the oil companies.

Based on the estimates of the industry players, the price of diesel in particular will have a heftier rollback of P1.00 to P1.40 per liter; while gasoline product prices will be trimmed at relatively leaner P0.40 to P0.80 per liter.

For kerosene, which is generally used as a base for aviation fuel and also a key commodity for households and key industries, its price reduction will be P0.80 to P1.20 per liter.

The oil firms will implement their price adjustments on Tuesday (November 7) based on cost swings of the Mean of Platts Singapore (MOPS) index, with integrated impact of foreign exchange rate (forex) fluctuations, market premium as well as biofuel costs.

So far, the MOPS-calculated price reduction across products had been P1.236 per liter for diesel; P1.032 per liter for kerosene; and P0.0643 per liter for gasoline; but the final adjustments will depend largely on the sway of competitive market forces.

Prior to this round of adjustment, a monitoring report of the Department of Energy (DOE) has shown that prices since the start of the year still logged net increases of P14.20 per liter for gasoline; P10.45 per liter for diesel; and P5.04 per liter for kerosene.

As indicated by global experts, the prices of traded fuel commodities were generally on downswing last week as fuel inventories had been on escalation – especially in the United States, signaling a scenario then that the market is well supplied with oil.

Nevertheless, there had been factors which emerged as of end-week trading that affected market sentiments; and that pulled back international benchmark Brent crude prices to the level of $87 per barrel from $84-$85 per barrel most trading days last week.

Market watchers noted that the decision of the US Federal Reserve and Bank of England not to hike interest rates had generally lifted prices by Friday (November 3) trading.

Onward, there are no clear direction yet how oil prices will be taking their stride next week and there are no definitive trend manifesting if the buoyed prices will carry on or if price crash will reign in markets again next week.

As an oil import-dependent country, price rollbacks will always be good news to Filipino consumers because that will take the edge off on household budgets; and will likewise ease inflationary pressures on the economy.
 

Diesel prices cut by P1.25/liter; gasoline up P0.45/liter

BY MYRNA M. VELASCO

Oct 30, 2023 09:31 AM

  

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AT A GLANCE

• Long holiday-propped driving will have mixed price adjustments at domestic pumps this week.

• Diesel will have a substantial rollback of P1.25 per liter.

• Gasoline will have an increase of P0.45 per liter.

• Kerosene will be reduced by P1.20 per liter.

• Shell Pilipinas Corp., Seaoil and Cleanfuel have already announced their price adjustments. Competitor firms are expected to match the new price trends.

• Prices for gasoline, diesel, and kerosene have increased since the start of the year.

• Price swings in the world market have been affecting market sentiments.

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Long holiday-propped driving will bring forth both cheers and misery to the consumers given the mixed price adjustments that will be implemented at the domestic pumps this week.

Based on the announcements of the oil companies, the price of diesel will have a substantial rollback of P1.25 per liter; but gasoline users are not as lucky, because that commodity will have an increase of P0.45 per liter.

 For kerosene products, this will also be reduced by P1.20 per liter  in this week’s round of cost movements, according to the pricing advisories of the industry players. 

 As of press time, the oil firms that already sent notices on their price adjustments effective Tuesday (Oct. 31) had been Shell Pilipinas Corp., Seaoil and Cleanfuel; while their competitor-firms are anticipated to match the new price trends. 

Prior to this round of cost movements, a monitoring report of the Department of Energy (DOE) has shown that prices since the start of the year still logged net increases of P13.75 per liter for gasoline, P11.70 per liter diesel and P6.24 per liter for kerosene.

 Price swings in the world market had been on constant seesaw last week due to confluence of factors affecting market sentiments, hence, the mixed adjustments manifesting at Philippine petroleum pumps this week.

The major circumstances that swayed outcome of commodities trading last week centered on intensifying geopolitical risks in conflict-ridden countries; as well as renewed concerns on probable slower economic rebound globally. 

 In particular, international industry players have been keeping closer watch on possible market impact of the lingering Israel-Palestine war; and any possible turn of events that oil-producing countries like Iran would be joining the fray.

 As of Friday (Oct. 27) trading, the price of international benchmark Brent crude had climbed anew above $90 per barrel, which has been higher by more than $2.00 per barrel from $88 per barrel average price for most of trading days last week.

 For an import-dependent economy like the Philippines, it will always need to fervently assess the inflationary impact of high oil prices – primarily on the costs of basic commodities and services; that in the process will not just be squeezing consumers’ pockets, but will also strain the operating processes of businesses.

Oil prices back on hefty hikes next week

BY MYRNA M. VELASCO

Oct 21, 2023 08:34 AM

  

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AT A GLANCE

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Filipino consumers will brace for new wave of roller coaster ride of hefty price hikes at the oil pumps next week, with diesel rising by as much as P1.20 to P1.70 per liter, based on the calculation of the oil firms.

For gasoline products, this will also increase by P0.85 to P1.35 per liter; while kerosene prices will go up by P1.20 to P1.60 per liter, according to the estimates of the industry players.

The oil companies will be adjusting their prices on Tuesday (October 24) based on the swing of prices as anchored on the Mean of Platts Singapore (MOPS), which is the adopted pricing reference of the country’s deregulated downstream oil sector. 

As culled from MOPS-calculated adjustments, the anticipated spike in diesel prices would be P1.203 per liter; gasoline at P0.882 per liter; and kerosene will be P1.241 per liter.

Nevertheless, the final adjustments at the gas pumps may differ because there are other factors affecting price fluctuations – including foreign exchange rate, biofuel costs, market premium as well as the precarious sway of competitive forces in the market.

Prior to this round of cost movements, a monitoring report of the Department of Energy (DOE) has shown that price swings since the start of the year had logged net increases of P12.25 per liter for gasoline; P11.35 per liter for diesel; and P5.94 per liter for kerosene.

As indicated by industry experts, one of the major developments that sent global oil prices on the escalation track had been the announcement of the United States on the replenishment of its strategic petroleum reserve or SPR. 

The US Department of Energy (DOE) primarily sounded off plans on buying 6.0 million barrels of crude oil for its SPR that will be up for deliveries within December 2023 to January next year.

The other geopolitical events that impacted world oil prices had been the US enforcement of further sanctions on Iran; while a counterweight to that had been the easing of sanctions on Venezuela.

Of the colliding factors, however, the end game for prices in the world market still tracked uptrend, with international benchmark Brent crude surging past $93 per barrel last week.

Market watchers noted that the lingering Israel-Palestine war may have already started taking its pinch on oil markets, but it remains to be seen how wide it could really influence market fundamentals in the weeks ahead.

For the Philippine market, the rising tide of the black gold will continue to fuel uncertainties not just on the consumers’ pockets, but on the overall wellbeing of the country’s economy.

Finally, rollback in pump prices due on Tuesday

BY MYRNA M. VELASCO

Sep 23, 2023 08:25 AM

  

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AT A GLANCE

• In the Philippine oil market, consumers’ uproar has been escalating due to relentless price hikes at the pumps – not just on the public transport drivers’ bid for fare hikes, but also on demand for subsidy as well as scrapping of value added taxes (VAT) for oil commodities.

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After 11 weeks of financial torment at the gasoline stations, consumers can finally heave a sigh of slight relief as oil prices will be on rollback at the pumps by Tuesday (September 26), based on the calculation of the oil companies.

According to the industry players, the price of diesel products will be trimmed by P0.30 to P0.70 per liter; while gasoline prices will be reduced by P0.20 to P0.60 per liter.

The oil firms similarly calculated that the price of kerosene, which is an essential base for aviation fuel and also a necessity for many Filipino households, would be down by P0.45 to P0.85 per liter. 

The actual estimates on price cuts as indexed on the Mean of Platts Singapore (MOPS) had been P0.41 per liter for gasoline; P0.50 per liter for diesel and P0.659 per liter for kerosene, but the final adjustments at Philippine pumps may vary because of other factors, such as market premium, foreign exchange rate as well as biofuel mix to diesel and gasoline products.

Prior to the forthcoming round of cost movements, a monitoring report of the Department of Energy (DOE) has shown that prices since the start of the year still logged net increases of P17.50 per liter for gasoline; P13.60 per liter for diesel; and P9.94 per liter for kerosene.

Prices in the global market last week had been on seesaw, but it was the decision of the US Federal Reserve on extended interest rate hikes policy that eventually tamed oil prices, according to industry experts.

The counterbalance to that market development had been the decision of Russia to restrict its diesel and gasoline exports, hence, the anticipated price rollbacks had been partly squeezed toward end-week trading. 

The Russian government, in particular, has temporarily banned gasoline and diesel exports to all countries, except those of Armenia, Belarus, Kazakhstan and Kyrgyztan, and that exerted fresh round of price pressure on the fuel commodities.

International benchmark Brent crude was still wobbling at $93 to $94 per barrel most of trading days last week, and there’s no certainty at this point that it will be heading downtrend in the days ahead.

And as oil prices are not leveling off on stable ground yet, global investment bank Goldman Sachs has been projecting the recurrence of $100 per barrel oil, especially so since many energy markets in the world have been fumbling on their energy transition agendas that are anchored on renewables.

In the Philippine oil market, consumers’ uproar has been escalating due to relentless price hikes at the pumps – not just on the public transport drivers’ bid for fare hikes, but also on demand for subsidy as well as scrapping of value added taxes (VAT) for oil commodities. 

Hefty price spikes at the gas pumps next week

BY MYRNA M. VELASCO

Sep 16, 2023 07:42 AM

  

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AT A GLANCE

• As noted by industry experts, the unabated rally in prices were not just due to lingering supply pressure on the production cuts and export curbs of the Organization of the Petroleum Exporting Countries and its ally-producers (collectively known as OPEC+) – primarily the impositions of Saudi Arabia and Russia; but also renewed forecasts of reinforced demand for China.

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With successive cost spikes already running on its 11th week, the consumers’ drive to the gasoline stations will mimic another episode akin to squeezing blood from stone as petroleum prices will incur hefty increases next week, based on the calculation of the oil companies.

According to the industry players, the price of gasoline will go up by P1.70 to P2.10 per liter; while diesel prices will surge by P2.20 to P2.60 per liter.

Kerosene, which is the other commodity in the triumvirate of weekly price adjustments, will also rise significantly by P2.00 to P2.40 per liter, as estimated by the oil firms. 

The new wave of price hikes will be implemented on Tuesday (September 19); and it will be anchored on the Mean of Platts Singapore (MOPS), an index of traded fuel commodities in the Asian region which has been adopted by players in the deregulated Philippine downstream oil industry as reference on their weekly price adjustments.

Prior to this round of price hikes, a monitoring report of the Department of Energy (DOE) has shown that cost movements since the start of the year already logged aggregate upticks of P15.50 per liter for gasoline; P11.10 per liter for diesel; and P7.94 per liter for kerosene products.

According to global experts, the unabated rally in prices were not just due to lingering supply pressure on the production cuts and export curbs of the Organization of the Petroleum Exporting Countries and its ally-producers (collectively known as OPEC+) – primarily the impositions of Saudi Arabia and Russia; but also renewed forecasts of reinforced demand for China.

Market watchers noted that both the manufacturing as well as retail sales in China have been logging favorable data, and that sparked off sentiments in oil markets of probable supply tightening in the weeks and months ahead. 

As of Friday (September 15) trading, international benchmark Brent crude drastically climbed above $93 per barrel, and that has been re-igniting fears of $100 per barrel oil swamping oil markets in the remainder of the year. That was a remarkable jump from last week’s $89 per barrel level.

Further, the OPEC has reiterated projections of oil demand growth for 2024 – and that is seen reaching the scale of 2.25 million barrels per day, to be propelled by faster economic recovery in many major economies of the world.

The foreseen acceleration in demand will provide counterweight to the lingering dilemmas of some countries on rising interest rates and inflationary impacts on their basic costs of goods and services.

In the Philippines, the din of protests in the streets still circles around the niggling bid of the public transport sector for fare hikes as they face continued financial distress from weekly price upswings at the pumps.