Fuel, kerosene prices raised by 50

MANILA, Philippines – Major oil firms in the country have again jacked up the prices of gasoline, diesel and kerosene by P0.50 due to the continuing rise in world crude prices.

This will be the third time this month that oil firms have adjusted their pump prices upward.

Due to increasing regional product costs, Chevron Philippines has increased prices of Caltex Gold, Silver, regular gasoline, Power diesel and kerosene by P0.50 per liter at 12 noon yesterday.

Total Philippines has increased its prices of gasoline, diesel and kerosene by P0.50 per liter (VAT inclusive) effective 6 a.m. today, while Pilipinas Shell Petroleum Corp. has raised anew its pump prices by 50 centavos per liter.

Under a deregulated environment, petroleum players normally adjust their prices based on market forces or follow the adjustments made by other oil firms.

Based on the Department of Energy (DOE) monitoring, the month-to-date average price of Dubai crude increased by about $5 per barrel over the February average.

Likewise, gasoline and diesel averages were higher by about $4 per barrel and $10 per barrel, respectively, over previous month levels.  

The DOE also noted that world oil prices continued to hit record highs for four consecutive weeks amid lingering supply concerns and as the US dollar plumbed fresh lows against the euro.

Last week, Dubai crude and diesel once again posted higher by about $2 per barrel and $4 per barrel, respectively, over the previous week’s average.

Compared with the same period last month, Dubai crude and gasoline are higher by about $10 per barrel, while diesel soared by almost $17 per barrel.

Oil market analysts believed that speculative investment attracted by the weak US dollar is the primary reason why oil prices have risen so fast in recent months.

Traders quoted that since “black gold” is priced in dollars and buyers and speculators are armed with stronger currencies, crude futures offer a hedge against the falling dollar. Thus, oil futures bought and sold in dollars are more attractive to foreign investors.

While some analysts foresee oil prices could ease in the coming months amid concerns about slowing US economic growth, other analysts, however, believe that if US demand declines, the surging energy demand from China and India would absorb the same. 

As such, oil prices will show little signs of abating.   

Meanwhile, the International Energy Agency (IEA) trimmed its monthly estimate for world oil demand this year to 87.5 million barrels per day, with downward pressures from weaker economic growth in the Organization for Economic Cooperation and Development (OECD) mostly offset by stronger former Soviet Union (FSU) projections. 

Oil demand was forecast to increase by 1.7 million barrels per day in 2008 or 2.0 percent compared with 2007, when it grew by 1.1 percent.

In a meeting last March 5, the Organization of Petroleum Exporting Countries decided to keep its daily output target of 29.67 million barrels despite calls by US President George W. Bush for OPEC to review boosting output.

OPEC, which produces 40 percent of the world’s crude, blamed the high cost of crude on speculative buying as investors seek hedges against a weakening dollar and rising inflationary pressures.