Pump prices went up by as much as P1.05 per liter starting 6 a.m. Tuesday to reflect the movement of world prices amid tensions between Iran and Britain and lower US oil inventories.
Phoenix Petroleum Philippines, PTT Philippines, Unioil Philippines, Chevron Philippines, Pilipinas Shell Petroleum Corp., Seaoil Philippines, Flying V, and PetroGazz issued separate advisories of the increase while other oil firms are likely to follow suit.
“Effective 12:01 a.m. Jul 16, Chevron Philippines Inc. (Caltex) will increase wholesale posted price (WPP) of Platinum and Silver by P1.05 per liter, diesel by P0.70 per liter and kerosene by P0.70 per liter (all VAT-Inc),” Chevron said.
Last July 9, most of the oil companies increased the price of gasoline by P0.25 but cut the price of diesel and kerosene by P0.40 and P0.35, respectively. Oil companies adjust pump prices on a weekly basis while prices vary depending on the brand, location and market forces.
With the latest oil price increase, year-to-date adjustments stand at a net increase of P6.20 per liter for gasoline, P4 per liter for diesel and P2.45 per liter for kerosene.
According to the Energy Department’s weekly monitoring, world oil prices surged to a seven-week high amid a gathering storm in the US amid tensions in the Middle East.
A storm in the Gulf of Mexico has intensified to become Tropical Storm Barry while tensions remained high as Iran attempted to make good on a threat to seize a British tanker.
Iran is retaliating UK’s capture of one of its vessels laden with crude off the coast of Gibraltar.
Iran announced Britain could face “consequences” and three Iranian vessels tried to block the passage of a British ship run by BP through the Strait of Hormuz. Iran withdrew after warnings from a British warship.
Meanwhile, reports that US inventories declined with rig count on downtrend also affected oil prices.
The Energy Information Administration said US crude stocks fell 9.5-million barrels in the week to July 5.
As this developed, the Joint Congressional Oversight Committee on Biofuels has announced that it will look into the feedstock and pricing problems that continue to plague the biofuels industry in the country when the 18th Congress opens.
Senator Sherwin Gatchalian, chairman of the Senate Committee on Energy, made the statement after hearing the complaints of ethanol producers who said they were now having a tough time supplying bioethanol as the skyrocketing prices of molasses have rendered their production uneconomical.
“They say that they might soon be left without a choice but to stop the production of bioethanol since oil companies no longer buy from local ethanol plants if the price of bioethanol is too high,” Gatchalian said.
“In fact, they are saying that there’s already a plant that is no longer producing bioethanol because of high price of molasses.”
“This situation, if left unaddressed, is expected to worsen given the growing demand for bioethanol brought about by the climbing demand for gasoline,” he added.
Gatchalian said the oversight committee, together with the Department of Agriculture and other government agencies who are members of the National Biofuels Board, will look for ways on how to efficiently grow sugarcane production leading to an increase in domestic molasses production, decrease in molasses prices, decrease in bioethanol prices, and ultimately a decreased pump price for consumers – all while meeting the demand for bioethanol.
The committee will also explore interim solutions to provide feedstock for existing ethanol plants and will reiterate the need for increased research and development for other feedstock for the long term, he added.
The lawmaker blamed the rising feedstock prices on the limited availability of local molasses, which is used as feedstock for more than 90% of bioethanol plants in the country.
The current price of molasses stands atP11,500 per metric ton, which, according to Gatchalian, resulted in the increased price of bioethanol to around P59 per liter or higher.
Gatchalian cited DOE data which showed that operating bioethanol plants with 365 million liters of capacity only produce 270 million liters of bioethanol.
He said this figure is below the 10% blend requirement of 550 million liters. The DOE also noted a shortfall in molasses production, prompting the government to import 50.91% of bioethanol.
In crop year 2017 to 2018 alone, Gatchalian estimated that around 78 percent of total molasses produced was used as feedstock for bioethanol and thus resulting in the domestic production of 49.09 percent of bioethanol demand.
“We plan to convene the Joint Congressional Oversight Committee on Biofuels to look into the feedstock and pricing problem, and, in the end, come up with long term solutions to this perennial problem,” the lawmaker said.
