New round of big-time fuel hikes this week

Motorists will have to cope with a new round of big-time hikes in the pump price of gasoline at the scale of ₱1.70 to ₱1.90 per liter, and ₱0.90 to ₱1.10 per liter for diesel products this week.

For kerosene products that are essential not just for Filipino households but also as base

fuel for industries such as aviation, this is anticipated to go up by ₱0.80 to ₱0.95 per liter.

The calculated adjustments do not include yet the price increase that will be imposed based on the hiked 10percent duty on imported crude and finished petroleum products.

Executive Order No. 113 issued by President Duterte last month imposed a higher import duty on fuel products while the Bayanihan to Heal as One Act is in effect, or become a temporarily policy over a period of six months or until December this year.

But after the Bayanihan Act had lapsed, policymakers from the Department of Energy and National Economic and Development Authority have yet to decide if the import duty hike would be terminated earlier.

The expected increase in domestic petroleum prices this week follow increases in global oil prices in the past trading days.

International benchmark Brent crude returned to an upswing reaching a level of US$42 per barrel, while Dubai crude, which is the benchmark for Asian markets, leveled at US$39 per barrel.

The rally in prices came followed the much-anticipated deal between the Organization of the Petroleum Exporting Countries (OPEC) and its ally-producers on prospective extension of the 9.7 million barrels per day production cuts. A meeting at which the deal is expected to be finalized is

scheduled this weekend.

Previously, a road block to the output cutback deal had been the perceived “weak compliance” of Iraq, but markets reacted favorably when the oil-producing country announced it would strive for stricter compliance.

Compared to the time of the coronavirus lockdowns when international prices had fallen to the level of US$18 to US$20 per barrel, oil markets are now manifestly on recovery mode as movement restrictions are already easing in most parts of the world.

According to earlier market forecasts, prices may go back to the level of US$50 per barrel toward the end of the year, but this could happen sooner than expected given the current developments.