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Big-time hikes in pump prices next week

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By Myrna Velasco

Prices at Philippine pumps are preparing for another round of big-time hikes next week – with the per-liter-cost of gasoline products rising by estimated P1.15 to P1.35 per liter, according to the estimates of industry players.

(Mark Balmores / MANILA BULLETIN)

(MARK BALMORES / MANILA BULLETIN)

For diesel, which is considered a more socially sensitive product generally used by the public transport, the calculated upward adjustments could be in the range of P0.80 to P1.00 per liter; while kerosene prices will increase by P0.95 to P1.15 per liter.

The new round of price hikes in domestic prices kept pace with the rally of international prices that had been reflected in the outcome of global trading of petroleum commodities last week.

Philippine oil companies are anticipated to implement price increases until Tuesday (July 2), which is the usual course in price adjustments at the retail pumps.

This upswing in cost movements will be happening at a time when the deregulated downstream oil sector is in a “chaotic juncture’ because of a policy being instituted by the Department of Energy (DOE) prescribing the unbundling of cost components being passed on to consumers.

There is a temporary delay in the implementation of the policy as the energy department opted to re-publish its Circular on the cost itemization rules, along with an “annex” requiring the submission of reports by the oil companies.

In the world market, there have been increases in the initial trading days of last week, but these had softened as of Friday – with benchmark Dubai crude settling at over US$63 per barrel.

Several developments are still being closely monitored – including the outcome of the scheduled meeting of the Organization of the Petroleum Exporting Countries (OPEC) and the Russian-led league of oil producers – as to whether or not they will keep their agreement on ‘production cuts’ to prevent unwarranted collapse in global oil prices.

Some market analysts are already forecasting that if the OPEC and non-OPEC producers would abandon their “production freeze” strategy, there is a tendency for oil commodities to hit rock bottom prices of US$30 per barrel again in the coming months.

Another development in the radar of markets was the scheduled Saturday (June 29) meeting of American President Donald Trump with Chinese President Xi Jinping on the sidelines of the G20 Summit in Osaka, Japan.

The spotlight is on the escalating ‘trade dispute’ between these two giant economies of the world, because the upshot of their talks could either lift up or worsen what is already being seen as slowdown in global economic growths.

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