MANILA, Philippines — Another double-digit spike at the pump is looming next week amid the global oil crisis, threatening to push diesel above P100 per liter and gasoline close to the P90 mark.
Diesel may surge by P19.30 to P22.30 per liter, while gasoline could jump by P14 to P17 per liter, an industry source told The STAR.
The estimates were based on four days of trading on the Mean of Platts Singapore, a key pricing benchmark for refined petroleum products.
The Middle East war, which paralyzed maritime traffic through the Strait of Hormuz, has “severely disrupted the supply chain” by cutting off crude shipments from one of the world’s largest oil-producing regions, the source said.
The disruption, the source added, has triggered refinery closures, output cuts and force majeure across Asia, given its reliance on supply from the Middle East.
Before tensions escalated, the strait had served as a major trade route for around 20 percent of the world’s oil and gas shipments.
This week, the Philippines saw the largest jump so far in fuel prices, with gasoline rising by P7 to P13 per liter, diesel by P17.50 to P24.25 and kerosene by P32 to P38.50.
According to the Department of Energy’s monitoring of six major oil firms, regular diesel ranges from P78 to P84.75, with premium diesel hitting up to P87.44.
Gasoline, meanwhile, is currently priced between P59.10 and P73.40 per liter, depending on the octane rating.
Energy Secretary Sharon Garin has said fuel prices are unlikely to drop anytime soon, given the uncertainties in the Middle East.
“This war is very erratic. We don’t know what’s going to happen. Nobody knows,” Garin told “The Big Story” on One News.
Yesterday’s trading will determine the final price adjustments, which will be announced on Monday and will take effect the following day.
Palace meeting
Executive Secretary Ralph Recto met with executives of oil companies at Malacañang on Thursday to address possible supply chain disruptions and continued fuel price hikes.
“The meeting focused on supply and prices, on how to keep both stable amidst the volatility we are seeing,” Recto said in a statement yesterday.
Garin was also present at the meeting.
Recto said the major issue that must be addressed proactively in a crisis “very, very dynamic” is supply chain disruptions.
“Thankfully the companies gave the assurance that whatever operational challenges in bringing the products here are manageable,” he said.
Recto said alternatives are already being explored, per the President’s instructions, if the war in the affected region would further choke oil supply.
“This is the kind of oil diplomacy that oil executives and the government will have to jointly undertake,” the executive secretary said.
At the meeting, Garin directed oil companies to ensure that gas stations properly adjust prices and in a manner that reflect real market conditions.
She said any premature, excessive or unreasonable increase in fuel prices would not be tolerated and would be dealt with firmly.
President Marcos has certified as urgent the bill suspending excise tax on fuel due to the rising oil prices as a result of the Middle East conflict.
Meanwhile, the Bureau of Internal Revenue has deferred to the Department of Finance the policy direction regarding proposed legislation on the suspension of excise tax collection on fuel.
Digital subsidy
Meanwhile, the Land Transportation and Franchising and Regulatory Board is eyeing the digital distribution of fuel subsidy.
According to LTFRB chairman Vigor Mendoza II, they have invited electronic money issuers (EMIs) in the country to be the payment channel provider for the fuel subsidy distribution worth P5,000 to each beneficiary.
“In engaging the services of electronic money issuers, our goal is to ensure an efficient, secure and transparent distribution of fuel subsidy assistance to program beneficiaries,” he said.
He noted that they need to first validate the capability of the EMIs to handle such transactions.
Transportation chief Giovanni Lopez earlier announced the distribution of fuel subsidies to the PUV sector starting next week.
Lopez noted that public utility vehicle operators may still get fuel subsidies from the Department of Transportation on top of the P5,000 aid coming from the Department of Social Welfare and Development, through its Assistance to Individuals in Crisis Situations (AICS) program.
“We have to start somewhere and we have to start somehow so that’s where the DSWD comes in,” he told radio dzBB.
“If we wait for the fuel subsidy under DOTr, there will be requisites or conditions and it will not be given right away,” he added.
In Balaoan, La Union, the municipal government distributed P3.3 million in fuel subsidy to 3,300 farmers, fishermen, tricycle drivers and operators yesterday, under the DSWD’s AICS program.
Meanwhile in Cagayan de Oro City, LTFRB Region 10 has identified around 10,369 beneficiaries across Northern Mindanao for the DOTr’s fuel subsidy program.
Cut air travel fees
At the same time, Lopez also ordered the Civil Aviation Authority of the Philippines to lower the passenger service charges and airport navigation charges in all CAAP-operated airports amid the ongoing oil price hikes.
This would help lower the operation costs of airlines, the DOTr said.
Based on the agency’s monitoring, jet fuel prices doubled from $90.87 per barrel last Feb. 19 to $188.2 per barrel on March 9.
DOTr added that the Civil Aeronautics Board also shortened the evaluation and implementation period from one month to 15 days to quickly reflect the changes in fares when jet fuel prices changes.
Jeepney fare hike
Transport group Manibela is pushing for a provisional fare hike of P2 amid the series of oil price hikes, which would raise the current base fare of P13 to P15.
“This will be enough in the meantime. This will be of big help somehow,” Manibela spokesman Mar Valbuena told GMA News.
While fare hikes are usually the last resort, Valbuena said the fuel subsidy under the AICS would not be enough. — Helen Flores, Josiah Antonio, Jun Elias, Gerry Lee Gorit, Janvic Mateo