Oil firms may cut diesel prices

MANILA, Philippines - Oil companies may cut prices of diesel this week albeit by a minimal P0.10 to P0.20 per liter, tracking movements in the global crude market.

In an advisory last week, PTT Philippines, an independent oil player and the local subsidiary of Thailand’s biggest oil firm, said fuel prices in the international market remain weak on the back of excessive supply.

“But peso depreciation against the dollar following the release of strong economic data from the United States, particularly its retail industry, partially offsets the effect of falling fuel prices,” PTT said.

Should oil firms push through with the price cut, it would mark the third consecutive week of price cuts.

However, PTT said there would be no movement in gasoline prices, according to the global crude market.

Last Monday, oil companies implemented the following downward adjustments: P0.85 per liter for gasoline, P1.10 per liter for kerosene and P0.90 per liter for diesel.

According to the Department of Energy (DOE)’s Jan. 13 oil monitoring report, big increases in the US gasoline and distillate inventories have raised expectations of a supply glut.

“Expectation of more oil from Libya, where output is back up to 546,000 barrels a day from 250,000 barrels a day. Libya normally produces nearly 1.5 million barrels a day,” the DOE said.

The report added that in Asia, the gas, oil and diesel markets were steady amid pockets of demand from Indonesia, Vietnam and Sri Lanka.

The report said although there is excess supply in the world market at present, it is expected to tighten next month.

“Overall demand in Asia-Pacific was still described as ‘weak’ but supply is expected to tighten next month with some scheduled refinery turnarounds,” the DOE said.