Oil companies hike pump prices anew

MANILA, Philippines -  Shell, Petron and Chevron yesterday raised their gasoline prices by 85 centavos per liter, diesel by 40 centavos and kerosene by 20 centavos per liter.

Over the weekend, the oil firms had already sounded off plans to jack up their prices by more than 60 centavos per liter.

These so-called Big 3 oil companies last week also raised their diesel prices by 60 centavos and kerosene by 50 centavos per liter. But the diesel price hike coincided with a P1 per liter rollback on gasoline products in response to competitive pressure as other small players reduced their prices Monday last week.

Data from the Department of Energy (DOE) showed that as of March 15, gasoline is sold at P52.25 to P57.96 and diesel at P44.65 to P46.65 per liter.

The DOE data also noted that week-on-week Dubai crude increased by $2.60 per barrel. MOPS gasoline also increased by $3.20 per barrel, while diesel and kerosene increased by $2.30 per barrel and $1.65 per barrel, respectively.

World oil prices, DOE said, recovered from a weeklong slump following the Japanese earthquake and traded higher last week amid more signs of steady growth in demand and ongoing geopolitical tensions in the Middle East and North Africa.

Phil Flynn, a senior analyst of PFG Best, said that the ongoing geopolitical tensions in oil-rich countries and concerns of serious potential oil supply disruptions are strong fundamental justification of the current price.

Along with this observation, Moody’s Analytics economist predicted that if oil production totally ceased in Libya, Bahrain and Yemen, oil prices could rise to $125 a barrel; and if Iran reduced production by 50 percent, prices could rise to $150 a barrel.

The analysts are of the assumption that the current turmoil could escalate across the Middle East major oil producers.

US inventory data also supported the increasing crude prices. It suggested further the country’s steady growth in oil consumption despite the rising prices.

US crude oil inventory reportedly rose by 2.1 million barrels last week but gasoline stockpiles dived by 5.3 million barrels.

On the other hand, Platts reported that the sustained buying of gasoline pushes prices higher. Platts said that Japanese spot demand was seen sustaining into April, even though refiners have maximized gasoline yield and have released strategic stocks.

Some analysts, however, believe that reduced demand in Japan following the twin natural disaster is one of the mitigating factors due to the country’s closed business establishments and industrial plants.

Nonetheless, Japanese demand for oil is expected to spike in the longer term as the country starts reconstruction efforts, especially with a nuclear capacity reduced by the quake damage at the Fukushima plant.