Consumers will have to brace for fuel prices to go up by as much as P1.60 per liter this week, the biggest increase this year to reflect the soaring cost of oil.
The oil firms raised the price of gasoline by P1.60 per liter, biodiesel by P1.15 per liter and kerosene by P1 per liter effective 6 a.m. Tuesday (May 22).
Energy Secretary Alfonso Cusi said the Oil Utilization Management Bureau has called for a meeting with the oil companies to discuss the surging oil price and what measures can be adopted to reduce its impact.
“It [oil price increase] is a burden to all of us. We need to conserve and use energy efficiently,” Cusi said.
Cusi said there is a mechanism on the implementation of excise tax when oil price reaches a certain level which serves as mitigating measure to consumers.
“We are studying options like suspension of excise tax on fuel, increase in existing fuel discount to public utilities [land], expedite price unbundling, energy conservation and efficiency, [and the] development of indigenous sources,” Cusi said.
World oil prices soared due to tight supply levels amid geopolitical concerns and strong demand.
A worsening crisis in Venezuela and worries about the US nuclear deal with Iran and sanctions on Tehran pushed up oil prices to new heights.
Data monitoring from the Energy Department showed that world oil prices was affected by US announcement of a possible sanctions on Iran.
US oil importers were advised to look for alternative suppliers to replace oil coming from Iran. Iran owns 12 percent of the Opec supply amounting to 32 million barrel per year.
Venezuela crude production dropped from 2.3 million per day to 1.5 million barrels per day due to the ongoing economic and political crisis.
Another factor is Opec’s deepening the supply cut led by Saudi Arabia, which announced its desire to increase the price of crude to at least $80 per barrel to balance its budget.
Senator Sherwin Gatchalian, for his part, said that from January to May, gasoline prices already increased by P8.07 per liter while diesel is up P8.95 per liter.
Gatchalian, chairman of the Senate committee on energy, urged the government to prepare ahead in the event that crude prices will reach the $100 per barrel threshold in the global market.
“Filipinos are really starting to feel the negative effects of rapidly rising global oil prices. This should send a clear signal to our government that it is time to start preparing for contingencies in case we hit the $100 mark,” said Gatchalian.
Phoenix Petroleum Philippines, PTT Philippines, Flying V, Eastern Petroleum Corp. and Seaoil Philippines issued separate advisories of the oil price increase while other oil firms are expected to follow suit.
“Phoenix Petroleum Philippines will increase the prices of gasoline by P1.60 per liter and diesel by P1.15 per liter effective 6 a.m. May 22,” the company said in its advisory.
Domestic pump prices of gasoline hit P60 per liter for gasoline, diesel reached P45 per liter while kerosene reached P55 per liter this month due to the continuing increase in world oil prices.
On May 15, the oil firms also raised the price of diesel by P1.20 per liter, gasoline by P1.10 per liter and kerosene by P0.95 per liter.
Gatchalian said world oil prices are already at $79 per barrel, the highest mark since November 2014.
He cited a report of Patrick Pouyanne, the chief executive officer of French oil company Total SA last week who warned that oil prices could hit $100 per barrel in the coming months.
Gatchalian urged the Energy Department to accurately forecast the expected price of crude oil over the next six months and lead the preparation of strategies that would minimize the impact of surging prices on public utility drivers and private consumers.
“DOE must ensure that it provides accurate estimates, so the government may be guided in crafting both immediate and long-term ways to insulate the country from shocks in the global oil market,” he said.
The senator said the “unusually accelerated pricing track” of petroleum products is disrupting public consumption.
Gatchalian also said government could explore reviving and expanding the Pantawid Pasada or the Public Transport Assistance Program, which was first rolled out in 2011, as an immediate mitigating program to shield the vulnerable sectors from the impact oil price hikes.
Under the program, holders of legitimate PUV franchise s were given cash cards worth P1,050 to buy fuel from accredited gasoline stations.
Domestic pump prices also went up this year due to the impact of the Tax Reform for Acceleration and Inclusion Act.
Socio-economic Planning Secretary Ernesto Pernia on Monday called for the faster processing of financial assistance to the public amid rapidly rising oil prices.
Pernia said the rise in global crude prices was alarming given their abrupt increase.
“Unconditional cash transfers, they just have to be more speedily disbursed to the 10 million poorest households and also the Pantawid Pasada,” he said.