Consumers will have to brace for higher pump prices as oil companies are set to increase prices effective Tuesday, a move that is feared to trigger a new round of price spiral and foul up government efforts to tame inflation in wake of food shortages.
“Expect fuel prices to go up again next week. Diesel should go up by P1.30 to P1.40 per liter while gasoline should increase by P0.80 to P0.90 per liter,” Unioil Philippines said in its price forecast advisory. The impending increase would be the 7th in as many weeks.
Other oil companies confirmed the expected increase, saying it is “potentially true” as they await the final computation tomorrow.
Two militant lawmakers on Saturday urged the government to repeal the Tax Reform for Acceleration and Inclusion Law in response to the Filipinos’ growing clamor for immediate economic relief amid skyrocketing prices.
Party-list Rep. Arlene Brosas of Gabriela and Ariel Casilao of Anakpawis, both members of the Makabayan Bloc, said the results of the latest Pulse Asia survey which indicated inflation control and wage increase as top urgent national concerns reflected the public’s sentiment of the government’s skewed priorities.
World oil prices have been reacting to the US sanctions against Iran, which could trigger a tightness in oil supply.
The US is expected to launch its sanction against Iran starting Nov. 4 and this has caused uncertainties on impact to global supply.
On Sept. 25, the oil firms raised the price of gasoline by P0.40 per liter, diesel by P0.20 per liter and kerosene by P0.15 per liter amid tight supply coupled with robust demand from Indonesia and the Persian Gulf on the back of reduced Chinese exports; refinery turnarounds and multiple refinery issues in the US midwest.
Diesel also experienced limited supply as demand continues to rise especially in Malaysia and Australia while Japanese refiners saw a decrease in production.
Prices was also influenced by anticipation of the meeting of the Organization of Petroleum Exporting Countries and non-OPEC major oil producers in Algeria next month to discuss scenarios for oil output.
According to data from the Department of Energy, year-to-date total adjustments stand at a net increase of P9.40 per liter for gasoline, P9.35 per liter for diesel and P8.25 per liter for kerosene.
Data also showed that gasoline currently range from P51.55 to P65.35 per liter, diesel sells from P44.30 to P53.55 per liter while kerosene is sold from P48.72 to P58.85 per liter.
Casilao said inflation was a red flag to economic health.
“It means the market is shrinking via low purchase power, naturally, foreign capital will be driven out of the country. This exposes that the reliance on foreign investment is unsustainable and vulnerable,” he said.
Brosas noted those who listed controlling inflation as top national concern posted a double-digit growth or by 12 percentage points from June to July 2018, indicating there was indeed a price shock affecting Filipino families across socio-economic classes.
This means that three out of five Filipinos want the government to effectively control prices, she added.
According to Brosas, the same survey also indicated more Filipinos were dissatisfied over the Duterte administration’s efforts to supposedly keep prices in control, with disapproval of government on this concern growing from 29 percent in June to 51 percent last July or a 22 percenrt-point increase.
“These figures dispute Malacañang’s position that price increases are just normal and that inflation is in control,” Brosas said.
Apart from junking the Train Law, Brosas said it’s about time Congress considered a review and approved the proposed House Bill 7787 which proposes increase minimum wage across regions to a uniform P750 national minimum wage.
“Since late last year, we warned against the economic impact of the TRAIN Law being deliberated then, especially price shocks via oil price hikes,” Casilao said.
The other day, Bangko Sentral ng Pilipinas said the rate of inflation could go as high as 7.1 percent in September, driven by higher prices of rice, fuel and some agricultural products as well as the weakening peso.
“Higher domestic petroleum prices, higher prices of rice and other agricultural commodities due to Typhoon 'Ompong,' and the peso depreciation contributed to the upside price pressures for the month,” the BSP Department of Economic Research said in a statement Friday, projecting inflation would settle within a range of 6.3 to 7.1 percent.
On the high end of the department’s estimate, this would be faster than the 6.4-percent inflation recorded in August, which was a nine-year high.
The last time the inflation rate breached 7 percent was in February 2009 at 7.2 percent.
But the Department of Finance said it expected the inflation rate to be unchanged at 6.4 percent in September, as lower power rates could offset higher food prices.
Finance Undersecretary Gil Beltran, also the DoF’s chief economist, said in an economic bulletin on Friday that month-on-month price increases in September likely decelerated from 0.9 percent in August to 0.6 percent.
As a result, he said “September year-on-year inflation is seen at 6.4 percent, unchanged from August.”
“Price increases in food items are the main drivers of inflation. The decline in power rates, however, moderated the inflationary pressure from non-food items,” Beltran said.
Beltran added that strong monetary action by the BSP backed by two successive 50-basis-point policy rate hikes and the President’s support for administrative measures proposed by the Economic Development Cluster to remove non-tariff barriers on major food items would moderate food inflation in the short run.