Oil firms cut prices anew story story

MANILA, Philippines - An early Christmas gift awaits motorists as local petroleum companies led by Petron Corp., the country’s biggest oil refiner, announced another price cut in gasoline and diesel effective today.

At the same time, an oil industry executive said that the price reductions may soon come to an end as global crude prices are starting to recover.

Effective midnight last night, gasoline prices will go down by P1.10 per liter while diesel prices will go down by P1.35 per liter.

Eastern Petroleum, an independent oil company, also announced a price rollback of P1 per liter for premium and unleaded gasoline and P1.30 per liter for diesel.

Chevron, owner of the Caltex brand, and Pilipinas Shell Petroleum Corp. also issued similar announcements.

Oil prices have gone down 27 times since the start of the year for gasoline and 33 times for diesel.

Prior to the Dec. 21 rollback, the latest cut was last week’s hefty price cut of P1.75 per liter for gasoline and P1.55 per liter for diesel.

Based on the latest oil price monitoring report of the Department of Energy (DOE), gasoline prices now range from P39.60 per liter to P45.70 per liter, while diesel prices are now at a range P30.75 per liter to P34.10 per liter.

The global crude market is now flooded with supply on the back of the slump in economies that used to be big consumers of oil such as China.

The DOE said in its report that crude prices have dipped to as low as $65 per barrel or about 40 percent lower since it started to fall in June on concerns of supply glut in the world market.

But oil industry sources said the main culprit is the growing use of shale oil by the US.

Shale oil is an unconventional type of oil from oil shale rock fragments. The use of shale oil caused the plummet of oil prices in the market, breaking the grip of the Organization of Petroleum Exporting Countries (OPEC).

US shale, which comes mostly from North America, costs $40 to $50 per barrel, or almost half compared to the $86 per barrel cost of oil from OPEC.