Gas firms primed for new round of increases
IT WILL be no smooth ride ahead for the beleaguered Filipino consumer and motorist.
Even as Filipinos meet the New Year with a temporarily deferred electricity rate hike and looming fare increases for rail (MRT/LRT) services, word is that diesel and gasoline products will make one last jump at the pump before 2013 ends.
The price increases in these
major fuel products could be imposed from early today, Dec. 31, according to industry sources.
Various estimates range from P0.85 to P1.15 per liter for gasoline, and from P0.60 to P0.80 for diesel.
Prices creeping up
Not including this anticipated rate adjustment, the year-to-date net increase for major fuel products stood at P3.93 per liter for diesel and P2.44 per liter for gasoline.
Year-on-year, gasoline prices grew in late December by 0.3 percent, or about P2 across a whole range of gasoline products and brands, according to data from the interdepartmental “Price Monitoring Charts” report. Diesel prices grew in the same period by 5 to 10 percent, or an average of P3 on the range of diesel products and brands.
During the Dec. 23-Dec. 27 trading week, crude trended higher in Asia for fear of supply disruptions in Africa and surprisingly strong oil demand in the United States.
Beyond govt’s control
An industry source said that while nothing really “serious” has happened overall, traders’ sentiments on tighter supply expectedly drives price trends.
Energy Secretary Carlos Jericho Petilla said the rise in fuel prices was beyond the control of government.
Deregulated
“It (the local oil industry) is deregulated and the problem of oil price spikes is not peculiar to the Philippines but is rather a worldwide problem. The more we gear away from oil dependence, the better we are,” he said.
Unfortunately, Supertyphoon Yolanda’s rampage in the Eastern Visayas, which supplies 15 percent of the country’s coconut oil exports, has threatened the government’s drive to increase biofuel use in order to curb petroleum imports. Coconut methyl ester, or CME, a biofuel, is derived from coconut oil.
Abroad, there are concerns that political violence in South Sudan, which restarted oil production only last April after a year of border skirmishes with its neighbor Sudan, could escalate into a civil war and disrupt the supply.
Supply disruptions
Still another factor supporting higher prices are fears about prolonged oil strikes in Libya, a member of the Organization of the Petroleum Exporting Countries (Opec), where groups of militias, tribesmen and civil servants have seized key oil fields and ports as leverage for political and financial demands.
Foreign buying
In the US, foreign buying is seen to drive the demand for gasoline and diesel, propping up fuel prices. Diesel enjoys robust winter sales as heating oil but a fresh report on US supply also indicated falling stocks for gasoline.
Traditionally, US gasoline inventories build up in the cold months as motorists keep their cars in the garage. And since American crude comes cheaper than Brent, the international benchmark, analysts have pointed at foreign influence on US oil demand.
Suspended animation
Meanwhile, consumers threatened with steep increases in fuel and transport costs in the new year are in a state of suspended animation.
Metro Manila consumers were recently hit by Manila Electric Co. (Meralco) announcement of a record P4.15 per kilowatt hour increase in the power generation and related charges that the distribution utility wants to collect from its 5.3 million customers to recover some P9.6 billion in additional power costs.
The rate increase was to be implemented this December and in February and March next year but the Supreme Court on Dec. 23 ordered Meralco to stop its implementation for 60 days while it studies its legality.
Public consultations
Public consultations on the proposed MRT3/LRT fare increases—LRT Line 1 Baclaran to Roosevelt: P30 from the present P20; LRT Line 2 Recto to Santolan: P25 from P15; MRT Line 3 Taft to North Avenue: P28 from P15)—ended in a stalemate in mid-December and government has yet to make a decision on thematter.