Oil firms to raise gas prices for third time this month

by Lenie Lectura - October 10, 2016

http://www.businessmirror.com.ph/oil-firms-to-raise-gas-prices-for-third-time-this-month/

PRICES of petroleum products increased twice this month, as prices in the world market soared during the past trading week.

In separate advisories, oil firms said they will jack up gasoline prices by P0.85 per liter, diesel by P1.55 per liter, and kerosene also by P1.55 per liter effective 6 a.m. on Tuesday, October 11.

As of press time, the following oil companies announced their respective price hike: PTT Philippines, Phoenix Petroleum, Caltex Philippines, Pilipinas Shell, Eastern Petroleum, Total Philippines and Seaoil.

An announcement last month to freeze production was blamed for the continued increase in international oil  prices.  The Organization of the Petroleum Exporting Countries (Opec) decided to halt production by up to 700,000 barrels a day, from the current level of just over 33 million barrels a day. A meeting is set next month to finalize details of an agreement.

“There is a high probability of oil prices being driven up as a consequence of Opec’s decision,” the Department of Energy (DOE) said.

Aside from this, DOE Undersecretary Felix Willam Fuentebella said on Monday a strong demand for oil products from the US and continued weakening of the peso against the US dollar are the main factors that led to this week’s price hike.

“Malaki ang demand ng oil products ng US at dahil dito ’yun production na dapat nabebenta sa lahat ay napupunta mainly sa US. Aside from that may effect din ang Opec decision sa pag control ng oil production. Mayrun ‘din issue on forex. Pero ang main factor ay ang strong demand ng America sa oil products,” Fuentabella said.

On October 4 oil companies effected increases of P0.35 per liter for gasoline and P0.60 per liter for diesel. These resulted to corresponding increases in the total year-to-date adjustments of gasoline and diesel to net increase of P3.74 per liter and P5.48 per liter, respectively.

Meanwhile, the DOE urged concerned agencies to exert all efforts to curb smuggling, particularly in Mindanao.

Mindanao price reductions in gasoline products for the period August 30 to September stood at P3. The DOE wants to zero in on possible predatory pricing, smuggling and illegal resale of petroleum products in Mindanao.

“While price rollbacks like this are a welcome development for the consumers, the DOE cautioned that sudden and sustained huge decreases in oil prices might qualify as an ‘anticompetitive behavior’ under the oil-deregulation law. This market behavior puts both the smaller oil players and the consumers at a disadvantageous position in the long run. Smaller oil players may actually lose its market share and end up closing, allowing the remaining oil players the chance to dictate prices to the detriment of the consuming public,” the DOE said.