‘Brace for P2 oil price hike’

MANILA, Philippines - Consumers should brace for an increase in gasoline prices this week, the first hefty price hike for the year as the period of low oil prices is now at risk of coming to an end given uncertainties in the global crude market.

Local pump prices are expected to rise in the range of P2 per liter this week, the first hefty price increase for the year on the back of uncertainties brought about by global oil companies’ announcement that they would curb crude oil production, an industry source said.

The Asian benchmark Dubai crude rose last week, increasing by an average of $7.50 per barrel compared to the previous week, which industry players are attributing to weak US economic data and the announcement of global oil companies that they will cut capital expenditures for 2015.

“This has fueled speculation that reduced investments will curb crude oil production,” the source said.

Energy Undersecretary Zenaida Monsada said it was difficult to say when prices would move up again but noted that there are indeed uncertainties in the market.

She noted that while there is still a supply glut in the global crude market, there are also uncertainties such as a strike by oil industry workers in the United States that may indeed push prices up, albeit slightly.

Data showed that in February, Dubai crude averaged $52 per barrel versus the January average of $45.50 per barrel, or an increase of 14 percent.

Asian diesel prices, meanwhile, have increased by an average of $6 per barrel this week compared to the previous week, supported by lower stockpiles in Japan and demand from other Asian countries ahead of maintenance turnarounds at several refineries.

Since the second half of last year, gasoline and diesel prices have decreased anywhere from P18 to P19 per liter.

This year alone, gasoline prices have decreased four times totaling P3.60 per liter while diesel has been rolled back five times amounting to a total rollback of over P4 per liter.

The latest price adjustment was last week when oil firms announced a 30 centavos per liter rollback for diesel. They kept prices of gasoline and kerosene unchanged.

To date, the price of diesel ranges from P23.70 to P28.70 per liter while gasoline prices range from P33.40 to P40.60 per liter. The common price of diesel, meanwhile, is P25.90 per liter and P37.60 per liter for gasoline.