Oil firms cut pump prices

MANILA, Philippines -  Several oil companies are set to implement today substantial cuts in fuel prices.

Chevron Philippines Inc., Petron Corp., Pilipinas Shell Petroleum Corp., Seaoil Philippines Inc. and Eastern Petroleum will roll back diesel prices by P1.75 per liter, kerosene by P2 per liter, and gasoline by 75 centavos per liter to reflect the decline of prices in the international market.

Chevron, Shell and Seaoil’s price rollback takes effect at 12:01 a.m. and Petron’s and Eastern Petroleum’s at 6 a.m.

“Over the week, oil price movements were mostly influenced by the appreciation of the US dollar against other major currencies,” the Department of Energy (DOE) said.

International analysts believe the appreciation of the US dollar largely explains the downtrend in crude prices.

But they said other factors might push oil prices up, including the expected rise in demand mainly in non-OECD (Organization for Economic Cooperation and Development) countries, as well as concerns over crude oil supply. International Energy Agency (IEA) chief economist Fatih Birol said China, India and the Middle East are driving the global energy demand.

“They are responsible for more than 90 percent of the growth in global energy demand,” Birol said.

The IEA is looking at 1.3 percent annual demand growth for the next five years, with 41 percent of that demand coming from China alone. 

Thus, the Organization of Petroleum Exporting Countries needs to produce more oil in order to meet the demand in 2011. 

The DOE also said the unsettled Greece bailout as well as fears of contagion through the Eurozone were also exerting pressures on prices. 

The Greek debt drama continues to hang over the financial markets with Eurozone financial ministers giving Greece over the weekend two weeks to adopt drastic austerity measures, or face the prospect of no emergency funds.

On the local front, oil firms last implemented price cuts on June 21 - 25 centavos per liter for diesel and kerosene.

Before the latest price reduction, the average price of diesel stood at P45.70 per liter, and gasoline, P55.40 per liter.

The year-to-date net increase in diesel prices is P7.05 per liter, while gasoline’s remained at P6.47 per liter.