Oil prices lower today; October electricity rates down

Danessa Rivera (The Philippine Star) - October 8, 2019 - 12:00am

https://www.philstar.com/headlines/2019/10/08/1958363/oil-prices-lower-today-october-electricity-rates-down

MANILA, Philippines — Consumers will enjoy lower oil prices today and stable electricity rates this month.

Manila Electric Co. (Meralco) is projecting overall electricity rates to remain flat this month.

Generation costs are expected to go down this month on account of robust power supply and tamed wholesale electricity spot market (WESM) charges, according to Lawrence Fernandez, Meralco head of utility economics.

“We foresee a downward movement from (actual cost from suppliers), as the supply situation improved and WESM prices were generally lower,” Fernandez said.

However, net settlement surplus (NSS) refund ordered by the Energy Regulatory Commission (ERC) may offset the decrease in generation charge.

“For October, the NSS refund will be less than P400 million. The smaller NSS refund may offset the effect of the lower generation cost, so that we expect the final generation charge to be relatively flat,” Fernandez said.

In August, the ERC ordered the Philippine Electricity Market Corp./Market Operator to return nearly P2 billion to Luzon and Visayas consumers due to miscalculations.

The NSS is the surplus or deficit remaining after all market transactions have been accounted for. This accounts for price differences occurring between generator and customer locations or nodes due to losses and congestion given the WESM’s locational marginal pricing scheme.

The NSS is distributed to trading participants that are entitled to receive a share of the surplus or deficit in accordance with an ERC-approved methodology.

“Given the two factors – lower generation costs but smaller NSS refund – we expect power costs to remain stable, after five consecutive months of reductions,” Fernandez said.

Last month, Meralco’s overall rates decreased for the fifth straight month, representing a total downward adjustment of almost P1.52 per kwh since April.

It said its overall electricity rates decreased by P0.526 per kilowatt-hour from P9.5674 per kwh in August to P9.0414 per kwh in September.

Lower oil price set

Meanwhile, oil companies are reducing the prices of gasoline, diesel and kerosene by P0.80, P1 and P1.15 per liter, respectively, today.

Chevron Philippines (Caltex) said its price change would start 12:01 a.m.

Petro Gazz, Pilipinas Shell Petroleum Corp., PTT Philippines and Seaoil Philippines will adjust pump prices starting 6 a.m.

Phoenix Petroleum Philippines led the price cuts with a decrease of P0.80 per liter on gasoline and P1 per liter on diesel last Saturday.

In the world market, international oil prices dropped as Saudi fully restored oil output by end of last month.

This is the second consecutive week that oil firms rolled back pump prices.

Prior to this week’s price changes, year-to-date adjustments stand at a net increase of P6.41 per liter for gasoline, P5.22 per liter for diesel and P2.76 per liter for kerosene, latest data from the Department of Energy showed.