Oil firms mull price hike of 25¢-30¢

Local oil companies are likely to raise anew prices of oil products by 25 to 30 centavos per liter within the next two weeks.

Pilipinas Shell Petroleum Corp. external affairs manager Robert Kanapi said the increase is inevitable after the price of Dubai crude started to go up in the past few days.

The price rise in Dubai crude came after the Organization of Petroleum Exporting Countries decided to extend the cutback in oil production by another three months.

"We are closely monitoring the market. If we will make a decision, we will probably announce it before the end of this month," Kanapi told reporters.

He noted that the relatively stable exchange rate would only cushion the impact of the possible oil price hike, but not prevent it.

Kanapi also said they are still studying if the impending price adjustment would be limited to 22 centavos.

Businessman Raul Concepcion, chairman of the Consumer Oil and Price Watch, has predicted that pump prices of fuel products would go up by 22 centavos this month.

Concepcion’s forecast came as the benchmark Dubai crude went up by an average 61 cents per barrel to $24.52 per barrel in the last two weeks, from $23.19 last month.

On the other hand, the peso-dollar exchange rate remained somewhat stable, averaging P50.46 this month compared to P50.43 last month.

As a rule of thumb, every $1 adjustment in crude price translates into an additional 34 centavos in the price of gasoline, while a P1 hike in the exchange rate results in a 17-centavo increase.

The oil companies slashed their pump prices by 30 to 35 centavos per liter last June 26 to reflect the softening of the crude prices and the strengthening of the peso against the dollar.

New Petroleum Players Association of the Philippines president Fernando Martinez said they were looking at a 25-centavo per liter hike early next month.

During the period July 1 to 23, the price of Dubai crude reached $24.69 per barrel, compared to the June average of $23.19 per barrel. The exchange rate for the same period stood at P50.45, representing a minimal increase of two centavos compared to the exchange rate in June. – Donnabelle Gatdula