Another big-time fuel hike seen this week

Published May 17, 2020, 1:47 AM By Myrna Velasco
https://business.mb.com.ph/2020/05/17/another-big-time-fuel-hike-seen-this-week/

For motorists intending to leave their homes following the easing of quarantine restrictions, a not-so-good news will greet them as oil prices are headed for another round of hefty increases this week

Gasoline products are expected to go up by ₱1.40 to ₱1.60 per liter while the hike in diesel products is estimated at ₱0.40 to ₱0.60 per liter.

Kerosene, which is another essential commodity for households, and even key industries like agriculture and aviation, is expected to go up by as much as ₱2.30 per liter.

These figures are anchored on the calculation of oil companies based on the outcome of trading of petroleum commodities in the world market last week.

Oil companies are expected to announce new round of price adjustments on Tuesday (May 19).

On top of these anticipated price upswings, an additional ₱1 or higher increase will be implemented starting May 21 due to the 10 percent import duty hike on petroleum products.

As many countries are now easing up on their lockdowns, oil prices are also coincidentally rising – with international benchmark Brent crude escalating to the level of US$32 per barrel last week.

Dubai crude, the key pricing reference for Asian markets, also was on the uptrend to the level of US$29 per barrel last week. In the US market, its WTI crude likewise increased to S$29 per barrel level.

Prices generally collapsed in March and April following the enforcement of lockdowns worldwide to contain the spread of the coronavirus disease (COVID-19) which led to demand crash because of the restricted movement of people as well as the closure of many industries and businesses.

With the anticipated opening of countries to a “new normal,” industry experts are anticipating international oil prices to potentially swing back to the level of US$50 to US$60 per barrel in the second half or towards the end of the year.

In the Philippines, oil demand is expected to gradually recover next month when transportation services will be allowed on the streets.

The Department of Energy’s Oil Industry Management Bureau indicated that once the enhanced community quarantine (ECQ) is lifted, the demand for oil will revert to pre-ECQ levels.

The DOE noted that demand for fuel dropped to as much as 50 to 60 percent during the two-month lockdown as against the consumption on the same period last year.