Oil companies expect new price hike for third week

INQUIRER FILE PHOTO

MANILA, Philippines — Motorists should expect to spend more on fuel consumption as oil companies are set to raise pump prices for the third consecutive week.

Over the weekend, Unioil estimated the price of diesel will rise by 70 centavos to 90 centavos per liter while gasoline will increase by 90 centavos to P1.10 per liter this coming week.

Earlier on Friday, the Department of Energy’s (DOE) Oil Industry Management Bureau Assistant Director Rodela Romero hinted at a possible increase, pegging the price hike at 45 centavos to 65 centavos per liter for diesel and 65 centavos to 85 centavos per liter for gasoline.

Oil companies, however, are not expected to adjust kerosene prices or might implement a rollback of 10 centavos per liter.

Romero made the estimates based on the four-day trading in the Mean of Platts Singapore, the daily average of all trading transactions of petroleum products in the Singapore trading hub.

Middle East tension

“These are attributed to the escalating tension in the Middle East, including the attacks on ships in the Red Sea and the Iranian missile strikes on targets in Syria and Iraq, that added to the geopolitical risk premium,” Romero said.

Although the bulk of the country’s oil imports pass through the Persian Gulf and not through the Red Sea, the halt to shipping through the Red Sea has led to a general increase in freight and insurance costs. She also attributed the fuel-price estimates to the Organization of the Petroleum Exporting Countries’ forecast of strong growth in global oil demand over the next two years.

Companies implemented the last price increase on Tuesday wherein gasoline went up by 30 centavos per liter while diesel and kerosene inched up by 90 centavos per liter each.

Price watch

Based on the DOE’s retail pump price monitoring in the National Capital Region, gasoline ranged from P51.90 to P77.70 per liter as of Jan. 16 to Jan. 22.

Diesel retailed from P51 to P79.81 per liter while kerosene was priced from P71.64 to P83.03 per liter.

Industry players announce any adjustment on pump price every Monday and implement them the following day on Tuesday.

Import cost makes up more or less 50 percent of the overall fuel pricing. Other factors taken into account in determining pump prices include taxes and industry take, which refers to the amount comprising the recovery of all the operating costs and profit margin of the oil company.