MANILA, Philippines - Oil companies Pilipinas Shell Petroleum Inc., Petron and Seaoil Philippines Inc. are reducing their diesel and gasoline prices by 50 and 25 centavos per liter, respectively, effective today.
Other oil companies are also expected to follow today the price movements.
Industry officials noted that local pump prices have been going down the past few days.
As of July 15, the average price of Asian Dubai crude declined by more than $5 per barrel, compared to the June average. Dubai is the price gauge of oil refiners.
Mean of Platts Singapore (MOPS) gasoline and diesel also plummeted by more than $6 per barrel in the same comparative period.
MOPS is being used as benchmark for pricing by oil importers.
Based on the Department of Energy (DOE) monitoring, oil prices tumbled early last week to its five weeks ago level reportedly due to growing evidence of an extended recession that could weaken energy demand for some time.
Economists believe that issues on the United States economy remain appalling and news on the European economy also appears no better, suggesting that oil use will continue to decline for another year.
The downtrend continued towards the end of the week, with Dubai crude trading to as low as P61 per barrel.
World oil prices decline
DOE data showed that oil prices have declined more than 10 percent since the end of June in a sell off spurred by doubts over the prospects of an economic revival in the world.
The price drop deepened following last week’s weaker-than-expected US employment data, and crude futures falling four percent last Monday. Analysts noted that a lack of positive economic indicators combined with uncertainty over the imminent slide in corporate earnings has sent investors fleeing assets, such as commodities, that are considered relatively risky.
The DOE said the market was also “in a significant technical correction and looking at a new bottom of around $60 a barrel.”
Meanwhile, MOPS gasoline and diesel also bottomed at an eight-week low level of P67 per barrel towards the end of the trading week.
The US-DOE data, which showed sharp increases last week in stockpiles of gasoline and distillates, including diesel, suggest that fuel demand remains weak despite the summer season in the US.