Oil firms roll back pump prices anew

MANILA, Philippines – Reflecting the big drop in global oil prices, Unioil Philippines Inc. yesterday rolled back the price of its gasoline by P3 per liter and P2 per liter for diesel and kerosene.

Unioil implemented the price reduction at 10 p.m. last night as other oil firms – Petron Corp., Pilipinas Shell Petroleum Corp., Chevron Philippines Inc., Eastern Petroleum Corp., Total Philippines Corp. and Seaoil Philippines Inc. – implemented a price reduction of P2 per liter across the board earlier yesterday.

The oil firms cited the downward trend in world oil prices as the grounds for the rollback.

Unioil initiated the rollback as other oil companies opted a “wait-and-see” attitude.

This latest reduction by the oil firms may answer the transport sector’s clamor for bigger price cuts.

For the month of August alone, oil prices have been reduced by a total of P8.50 per liter for gasoline and P6.50 per liter for diesel. This is the first rollback for the month of September.

Unleaded gasoline is now sold at P50.07 to P53.26 per liter; kerosene at P53.36 to P56.80; and diesel at P49.20 to P51.09 per liter.

“We are rolling back prices by P2 per liter. This is a market response to a very competitive market,” Eastern Petroleum president Fernando Martinez said.

The country’s petroleum players decided to reduce their prices amid the decision of the Organization of Petroleum Exporting Countries (OPEC) to cut its production level of 28.8 million barrels a day by 520,000 barrels per day from the July level.

The oil firms told the energy department that they would continue with the weekly but staggered price adjustments even as some camps prefer a one-time adjustment and others to reflect prices on a daily basis.

The August average price of Asian Dubai crude, benchmark of oil refiners, decreased by about $18 per barrel compared to the July average. 

The prices of gasoline and diesel also decreased by about $20 per barrel and $33 per barrel, respectively, over the previous month levels.

As a rule of thumb, every $1 increase or decrease is equivalent to a drop or rise of about 30 centavos per liter in local pump prices.

Based on the DOE monitoring last Sept. 2, there are some factors that may affect domestic oil prices.

These are mostly global phenomena such as the crude prices that edged up higher early last week due to fresh unrest in Nigeria, geopolitical tension in other producing countries and concerns over oil operations in the Gulf of Mexico. 

But the DOE noted that week-on-week average price of Dubai crude was almost the same as the previous week, while gasoline and diesel moved slightly higher by more than a dollar a barrel.

The unrest in Nigeria, however, added to higher oil prices in the week.

Security sources said a Nigerian ship owned by West African Offshore Ltd. with eight crewmembers was hijacked last Aug. 27 in the country’s oil-rich south.

The violence and kidnapping of oil workers in Nigeria’s volatile south have reduced total oil production by 25 percent since January 2006.

The oil market also tracked escalating tensions between Georgia and Russia, the world’s biggest oil producer. 

The United States, the largest energy consumer, is worried that in the wake of the Russian-Georgian conflict, US strategic interests in Ukraine and Azerbaijan could be at serious risk.

But the dollar’s advance against the euro, yen and pound had a dampening effect on the oil’s jump as oil prices reversed course and fell by the end of the week when traders discounted the impact of tropical storm “Gustav” as it churned toward the Gulf of Mexico’s energy installations last week.