MANILA, Philippines - Oil firms yesterday reduced their pump prices anew following the continuing drop in international oil prices.
Petron Corp., the country’s largest oil refiner, led the announcement of its price rollback late Sunday.
Petron, Pilipinas Shell, Chevron, Seaoil Philippines and Phoenix Petroleum reduced their diesel and kerosene prices by 75 centavos per liter and their gasoline prices by 50 centavos per liter.
Though implemented on the same day, the price cuts took effect at various hours of the day. Shell implemented its oil price cut at 12:01 a.m; Petron and Seaoil at 6 a.m.; Phoenix Petroleum at 8 a.m. and Chevron at noon.
Last June 29, the oil companies also brought down the prices of their diesel and gasoline products by 50 centavos and 25 centavos, respectively.
According to the monitoring data of the Department of Energy (DOE), the average price of Asian Dubai crude, the benchmark of the country’s oil refiners, was lower than the May average by nearly $3 per barrel as of June 29.
Gasoline price at MOPS (Mean of Platts Singapore), the gauge of oil importers, also went down by about $2 per barrel, while diesel is higher by about $1 per barrel.
Analysts noted that oil prices initially went up on the first trading day and gradually decreased over the next trading days of the week. Nonetheless, averages remain higher than last week.
On June 21, prices extended the previous week’s increases of more than four percent, as China’s decision to allow its currency to appreciate boosted investor confidence, and on expectations of higher demand from Chinese consumers.
China announced earlier that it will take steps to end the yuan’s two-year peg to the dollar and allow the Chinese currency to trade more freely. China has kept the yuan’s value artificially low since 2008.
However, prices fell Tuesday and onwards through the week, as investors weighed the effects of the Chinese Central Bank’s announcement that it would allow a more flexible yuan currency. Analysts said oil prices retreated on signs that any strengthening of the yuan would be gradual.
There were also several factors that led to the gradual decreases in oil prices, including the unexpected growth in US crude supplies.
The US Energy Information Administration said crude oil supplies increased by two million barrels last week contrary to analysts’ expectation of a drop in stockpiles.
The court ruling lifting the US government’s six-month ban on deepwater drilling in the Gulf of Mexico also affected oil trading last week.
Another issue that affected global oil price movements was the US government’s report that new home sales sank to the lowest level on record in May, indicating that economic recovery is still in low gear. This means oil demand is going to be weak.
From June 21-25, Dubai crude stood at $75.16/bbl, which was $0.09 per barrel higher than the previous week. Similarly, MOPS gasoline is higher by $0.11 per barrel at $84.99 per barrel; diesel also rose by $1.67 per barrel to $89.44 per barrel.
Last week, Petron and Shell also rolled back the prices of their liquefied petroleum gas or cooking gas by P2 per kilo as LPG international contract prices dropped by $48 per metric ton.