Brace for big-time fuel hike this week

As crude prices inch up to US$5960 per barrel in the global trading, a hefty increase in the pump prices of gasoline, diesel, and kerosene are expected next week.

Diesel products are expected to increase by 12 per liter, gasoline by 11.30 to 11.35 per liter, and kerosene by 11.75 to 11.80 per liter. According to industry players, this is based on the outcome of four-day trading in the international market last week, and price increases may still

change depending on the outcome of Friday (January 11) trading.

Bellwether Dubai crude climbed anew to the US$59 per barrel scale, while Brent crude already crossed the US$60 per barrel price range.

Rising prices in the world market are largely predicated on more bullish economic growth assumptions and the widely anticipated adherence of the Organization of the Petroleum Exporting Countries (OPEC) and its Russian-led ally on targeted production cuts.

This coming week’s inflated climb in prices is perceived to be ill-timed because this is the period when most of the gasoline stations will be enforcing the additional 12.00 per liter in excise for gasoline and diesel products in compliance with the second tranche package of the Tax Reform for Acceleration and Inclusion (TRAIN) Act of the Duterte administration.

The oil companies are anticipated to implement the price hikes on Tuesday (January 15) — with some stations reflecting both the actual increases in prices and the jump in fuel excise.

The excise increases on fuel this year was initially suspended by economic managers of the Duterte administration, but reversed that decision after observing that global oil prices had been precipitously plummeting in the last quarter of 2018.

On the tax adjustments, the Department of Energy (DOE) emphasized that it has been intensifying monitoring of the petroleum retail networks that passed on the higher tax charges earlier than expected.

Energy Secretary Alfonso G. Cusi warned oil companies against “profiteering’ as he deployed teams from the department to carry out spot checks on fuel excise enforcements in gasoline stations in Metro Manila.

Show-cause orders had also been served to oil firms which already implemented the excise adjustments – Petron Corporation, Flying V and Pilipinas Shell Petroleum Corporation.

The department’s Oil Industry Management Bureau (OIMB) explained that “a retail outlet’s imposition of excise tax depends upon the exhaustion of the 2018 existing inventories.”

The DOE added “only new inventories in 2019, directly imported or local produced by refineries, are covered by the second tranche of excise tax.”