World oil prices shot up while the dollar and yen advanced Monday after Hamas launched a shock attack on Israel at the weekend, sparking fresh concerns about tensions in the Middle East.
The crisis fanned concerns about supplies of crude from the region at a time when supply worries are already high due to cuts in production by Saudi Arabia and Russia.
It has also renewed fears about the impact on inflation, with energy costs a key driver of spiking prices, giving a fresh headache to central banks as they try to ease up on interest rate hikes to avoid recessions.
The surprise attack and Israel’s declaration of war in response to it have left more than 1,000 dead and raised concerns that a potential broadening of the conflict could draw in the United States and Iran.
Locally, oil companies rolled back pump prices by as much as P3.05 per liter effective 6 a.m. Tuesday, but industry officials said this did not yet reflect the impact the war in Israel would have on world oil prices.
The price of gasoline fell by P3.05 per liter, kerosene by P3 a liter, and diesel by P2.45 per liter, reflecting the movement of prices in the world oil market before the Hamas attack.
Phoenix Petroleum, Seaoil Philippines, PTT Philippines, Cleanfuel, Jetti Petroleum, and PetroGazz issued separate announcements of the rollback.
With the latest adjustment on Tuesday, the year-to-date increase for gasoline is at P12.25 per liter, diesel at P11.35 per liter, and kerosene at P5.94 per liter.
On Oct. 3, the oil companies cut the price of gasoline by P2 per liter and P0.50 per liter for kerosene. However, the oil firms increased diesel prices by P0.40 per liter.
“Natural gas plants supplying [power] to Meralco were compelled to use more expensive alternative fuel during the last supply month,” said Meralco’s head of utility economics, Lawrence Fernandez.
Also on Monday, Camarines Sur Rep. Luis Raymund Villafuerte questioned the move by Energy Secretary Raphael Lotilla to junk a two-year-old proposal for the government to put up a strategic petroleum reserve (SPR) to address volatile fuel prices.
Villafuerte, National Unity Party (NUP) president, said the decision of Lotilla was “ill-timed” as prices for oil look poised to go even higher with the Israel-Hamas war.
Amid speculation that the cost of oil in the global market could hit $100 per barrel in the months ahead, Villafuerte said he was disconcerted by the DOE’s decision to no longer pursue a plan started in the past administration to establish an SPR because—according to Lotilla—such a facility is expensive, would not directly slash fuel prices, and was incompatible with the government’s promotion of electric vehicles. With AFP