By Myrna Velasco
It will be an extreme financially draining week for Filipino consumers as prices of gasoline will climb by a hefty P2.35 per liter; while diesel prices will rise by P1.80 per liter this week.
The price of kerosene will also go up by P1.75 per liter – and this will come as a punishing blow not just for households but also for industries relying on this commodity, including those in the fishing sector as well as the aviation industry.
As of press time, the first one to send its cost adjustment advisory was Pilipinas Shell Petroleum Corporation; and the price hikes will be effective 6:00 a.m. on Tuesday (September 24).
The actual price adjustments just seesawed slightly from the initial estimates of the oil companies, because Friday trading in the world market has yet to be concluded when they hinted of the price trends.
The surge in prices this week is manifestly triggered by the drone strike on the facilities of Saudi Aramco last Saturday (September 14) – and its affected production accounts for roughly 5.0-percent of world oil demand.
As culled from the monitoring of the Department of Energy (DOE), “the drone attack on Saudi Arabia state-run oil giant Saudi Aramco oil processing facilities at Abqaiq and Khurais resulted to damages and crude oil production suspension of 5.7 million barrels per day or nearly 60% of the country’s average production.” As of August this year, Saudi Arabia’s production stood at 9.8 million barrels per day.
The affected processing facilities of Saudi Aramco are two of its largest – with 7.0 million barrels per day in Abqaiq; and 1.5 million barrels per day in Khurais.
By far, according to market watchers and analysts, “the drone attacks caused one of the largest oil spikes in crude oil history,” with the Dubai crude as benchmark for Asian refiners rising by about US$9 per barrel as of Tuesday (September 17) to the level of US$67.55 per barrel from a leaner US$58 per barrel prior to the drone assault.
Nevertheless, the rally in prices immediately tapered off toward the weekend to US$62 per barrel, as Saudi Aramco assures “immediate recovery”; while other global producers guaranteed replacement for the lost barrels.
Saudi Arabia, for its part, has a stockpile of 187.9 million barrels as of June, as culled from the Joint Organization Data Initiative (JODI) – which infers then that the oil kingdom still has a supply shield that could stretch for roughly 26.8 days.
At the same time, the Organization of the Petroleum Exporting Countries (OPEC) indicated that beyond Saudi’s capacity, its member-countries have spare capacity of 0.7 million barrels per day; while Russia said it could still lean on 0.25 million barrels of oil spare capacity.
The Strategic Petroleum Reserve (SPR) or the oil stockpile of the United States is also holding on to 644.8 million barrels of crude oil in four sites in Texas and Louisiana, based on data provided by the US Department of Energy.