The Department of Energy (DOE) yesterday forecast a big-time oil price hike of as much as P1.35 per liter next week to reflect the movement of prices in the world oil market.
“Another round of oil price increases is expected to happen next week. Estimated adjustments of the following products based on the 4-day trading in MOPS (Mean of Platts Singapore) are as follows: Gasoline – increase of P0.85 to P1.35 [per liter], diesel – increase of P0.75 to P1.25 and kerosene – increase of P0.95 to P1.10,” DOE Oil Industry Management Bureau (OIMB) director Rodela Romero said.
She explained that the looming increase was driven by the imposition of US sanctions on Iran, which could remove 1 million barrels per day from global supply; continuing attacks between Russia, Ukraine on energy installations; and the US threat of tariffs on nations buying Venezuelan crude oil.
Jetti Petroleum president Leo Bellas echoed DOE’s sentiment of another oil price hike next week.
Bellas said price movement indication for the week of March 31, based on this week’s MOPS and foreign average (first 4 days) versus last week’s full week average, showed a possible increase of P0.80 to P1 per liter in diesel and P1 to P1.20 per liter in gasoline.
He said world oil prices have spiked during the week due to supply and trade war risk concerns.
Bellas said fresh sanctions on Iran and tariff threats on Venezuelan oil buyers could tighten supply, thus pushing up prices.
The oil executive noted that the latest Organization of the Petroleum Exporting Countries and its allies’ (OPEC+) output plan, which will require seven member nations to make further oil output cuts to compensate for their past overproduction, could overtake the production hikes the group plans to introduce next month.
He said another factor contributing to higher fuel prices is the healthy demand in the US, as crude and fuel inventories fell more than expected.
Bellas said this overshadowed the adverse effects of the wider trade war on the world’s economy and demand for oil.
On March 25, local oil companies implemented a price increase of P1.10 per liter for gasoline and P0.40 per liter for diesel and kerosene.
Year-to-date, gasoline and diesel have a total net increase of P3.25 per liter, while kerosene has a total net decrease of P0.30 per liter.