DOE expects 'huge rollback' for all fuel products next week
MANILA, Philippines — Consumers expected to pay less for a liter of gas, diesel and kerosene next week after the Department of Energy (DOE) said it anticipates a big rollback of up to P6 per liter for all fuel products.
"We will have a huge rollback next week on all products [by] P5 to P6 per liter," DOE Oil Industry Management Bureau Director Rino Abad told Philstar.com in Filipino in an online message on Saturday.
He was referring to gas, diesel and kerosene products— the price adjustments of which are announced by local oil firms on a weekly basis.
Abad explained that the foreseen rollbacks are due to low global demand caused by: the continued lockdown in China's financial hub Shanghai; interest rate hikes in several countries including the U.S and U.K; and the threat of global recession which could led to "demand destruction."
New COVID-19 outbreaks prompted the Chinese government to place portions of China, including Shanghai, under lockdown, according to a July 7 report from Agence France Presse.
In mid-June, the US Federal Reserve raised benchmark interest rates by 0.75 percentage points, the largest hike since 1994. Around the same time, the Bank of England hiked interest rates for the fifth consecutive time to address inflation.
Back home, the Bangko Sentral ng Pilipinas also recently raised overnight borrowing, lending and deposit rates by 25 basis points to 2.50%, 2% and 3%, respectively.
Last month, the World Bank also forecasted that many countries will be unable to avoid recession, as global growth is expected to slump to 2.9% this year.
The Philippines is heavily reliant on the global market for its oil requirements, making it susceptible to price adjustments caused by global developments.
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Local oil companies have been raising prices of petroleum products since the start of the year due to tight supply which was worsened by large oil producer Russia's war against Ukraine.
The oil price spikes prompted the Philippine government to disburse subsidies to affected sectors, including the transportation and agriculture industries, in a bid to help them cushion the effects of the rising prices.
Year-to-date adjustments show that consumers now have to pay P30 more for a liter of gas, an extra P42.9 per liter of diesel; and an additional P36.35 per liter for kerosene.
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