Local oil firms hike prices anew

MANILA, Philippines -  Local oil firms yesterday raised the prices of their petroleum products, attributing the price hike to the increase in international prices.

Effective yesterday, Chevron Philippines raised the prices of their diesel products by P1.50 per liter, and their gasoline products by P1 per liter. The price of its kerosene products rose P1.25 per liter.

Pilipinas Shell Petroleum and Eastern Petroleum followed suit, implementing the same increases, although the latter will carry out the price hike today.

The Department of Energy (DOE) has anticipated the increase in oil prices.

Energy Secretary Jose Rene Almendras said that global oil prices have gone up to $129.50 per barrel last week from $123.42 per barrel the previous week. Gasoline price also went up to $127.4 per barrel from $116.8 per barrel.

The uncertainties in the global oil market are caused by the oil crisis in the Middle East. Oil prices have been rising for months but jumped last month after violence gripped Libya.

Since March 4, the retail price of gasoline and diesel rose P5 per liter.

Shane Oliver, chief economist at AMP Capital Investors, agrees that the political unrest in the Middle East and North Africa has been the driver of the latest spike in oil prices because eight countries in the oil-producing region are experiencing political tension.

In these regions, oil production is controlled by governments – not independent companies – one reason why oil prices are strongly linked to political stability.

On Monday, Asian benchmark Dubai crude breached the level of $100 per barrel last Feb. 21 – the first time since September 2008 – and stayed above that level within the trading week.

Almendras said there are discussions on initiatives for oil sharing agreements with Saudi Arabia, Japan, and Russia. But for now, local oil firms have been directed to maintain sufficient inventory.

The energy department issued a circular requiring oil companies to maintain a minimum in-country inventory of 15 days. The current level of oil inventory is at 60 days including oil-in-transit.

The country’s daily fuel consumption is estimated at 300,000 barrels or 48 million liters, about P1.6 billion per day.

Last year, the Philippines imported 81 percent of its crude requirements from the Middle East (mainly Saudi Arabia and United Arab Emirates), 12 percent from Asia, and 7 percent from Russia. 

Refined petroleum products, however, came from neighboring Asian countries, particularly Singapore, except for liquefied petroleum gas, which the country imports from Saudi Arabia, Qatar, and the UAE.

To address the burden of rising fuel prices among consumers, oil player Seaoil Philippines relaunched its fuel prepaid card that locks gasoline price at a fixed amount of P52 per liter for a period of two months.

In the event of a price rollback within the validity period of the card, clients can consume up to P1,040 worth of gasoline at the current pump price.