By:
Daxim L. Lucas - 06:14 AM December 03, 2016
The adverse effects of
the Organization of Petroleum Exporting Countries’ (Opec) decision to cut oil
production for the first time in eight years may be blunted by several local
factors, including the country’s gradual shift to other sources of energy and
motor vehicle use.
“We are seeing shifting
behaviors. Instead of using petroleum [products for motor vehicles], more
people are walking or taking electric vehicles,” Department of Energy (DOE)
Undersecretary Felix William Fuentebella said in an interview with radio
station DZBB.
He also outlined other
factors that could impact prices either positively or adversely, including the
cost of transporting petroleum products from the Middle East to the
Philippines, as well as labor issues affecting foreign oil producers.
Most importantly,
however, local petroleum prices are impacted by the foreign exchange rate,
where the local currency’s recent weakness against the US dollar means the same
amount of pesos can buy less crude oil on the international market.
The Opec decided this
week to reduce production by 1.2 million barrels a day starting Jan. 2017. This
sent oil prices to soar to above $50 a barrel.
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