DOE: Fuel price cuts possible if US Fed hikes interest rates

MOTORISTS should brace for another round of pump price adjustment after the US Federal Reserve holds its scheduled policy rate review next week, according to the Department of Energy (DOE).

DOE Oil Industry Management Bureau dire ct orri noe. a bad said the result of the review to be held on July 26 to 27 will determine if there will be fuel price hike or rollback in the coming days.

He attributed the three recent consecutive rollbacks in fuel prices to the fresh lockdowns in China due to the pandemic and the interest hike implemented by central banks worldwide, including the Fed reduced the demand for fuel.

The latest rollback decreased the price of gasoline by P5 per liter and diesel by P2 per liter.

Any additional interest rate hike from the world’s largest economy will cause other central banks to also raise their interest rates, according to Abad.

“It appears that it will be a global action again and there is a good chance that when that happens, it will be favorable for us to have a continuous rollback,” Abad said in a televised interview last Tuesday.

Without the new interest hike from the US Feds, Abad said the price for fuel could increase once again.

Currently, DOE is proposing the amendment of Republic Act 8479 or the Oil Deregulation Act to make the country’s oil supplies more resistant to external factors.

Among its proposed amendments is to mandate oil industry players to have a minimum inventory reserve and to give concerned government agencies the power to review the computation in the changes in pump prices.