Oil players raised prices this week by as much as P1.30 per liter after speculations of production freeze cropped up in the global oil market last week.
The oil firms issued separate price advisories of the increase amounting to P1.30 per liter for diesel and kerosene and P0.95 per liter for gasoline, reversing the price rollback last Feb. 16.
Eastern Petroleum Corp., in its advisory, said it will hike the price of diesel and gasoline by P1.30 and P0.95 per liter, respectively, at 6 a.m. Tuesday.
PTT Philippines, Phoenix Petroleum Philippines and Seaoil Philippines also issued separate advisories of the oil price increase. Other oil companies are expected to follow suit.
“Traders speculate that Russia is in talks with Saudi to freeze production to January levels although Saudi said it will only agree provided that the oil-producing countries will freeze production,” Energy director for Oil Industry Management Bureau Melita Obillo said.
Oversupply of US crude stock reaching 504.1 million barrels, increased output of the Organization of Petroleum Exporting Countries and the slowdown in demand from China has led to the significant decline in world oil prices since mid-2014.
“We expect oil prices will continue to fluctuate between $20 per barrel [operational stress level]and $40 per barrel [financial stress level] with significant volatility and no price trend until second half of 2016,” Goldman Sachs said.
It noted that the overhang in oil supplies together with an economic slowdown in China, means prices will remain low until the second half of the year.
The department said that despite report of talks to reduce production, competition between Opec members still appears to be fierce, with producers fighting for market share by lowering prices as Iran offered its crude to Asia at a discount to rival Opec producer Saudi Arabia.
Iran also cut its heavy crude price for export to the Mediterranean by a larger amount compared with top exporter Saudi Arabia as Tehran seeks to attract more buyers after sanctions were lifted.
Most local oil companies cut domestic oil prices last Feb. 16 of P1.40 per liter for gasoline, P0.70 per liter for diesel and P0.90 per liter for kerosene.
As this developed, Obillo said supply of liquefied petroleum gas is expected to remain stable despite the fire that engulfed South Pacific Inc.’s facility in Calaca, Batangas.
Obillo said supply coming from South Pacific, a company led by Rep. Arnel Ty, is not large enough to affect demand.
South Pacific is a new locator at the Phoenix Petroterminals Industrial Park engaged in the importation and wholesale distribution of LPG.
A fire broke out at the South Pacific LPG plant at about 4 p.m. on Feb. 20. The fire was contained within the plant at 4 a.m. of Feb. 21.