Gas, diesel prices to rise this week

GASOLINE and diesel products may increase by around P1.50 per liter this week amid fears that the worsening sectarian crisis in Iraq will disrupt exports from the world’s No. 3 supplier of crude oil.

Pump prices are expected to rise by P1.10 to P1.50 per liter due to the worsening Iraqi violence, an industry source said. As early as Friday last week, the domestic oil market was abuzz with rumors that prices of major fuel products could surge by more than P1 this week.

Oil firms are expected to make official announcements on the increase today.

Based on the benchmark Mean of Platts of Singapore (MOPS) average prices last week, local pump prices for gasoline and diesel are expected to increase by over P1 per liter this week, the sources said. During the June 16-20 period, the Iraq crisis sparked a P0.20 per liter increase on gasoline price and a P0.30 on diesel.

MOPS apparently tracked the recent surge in world crude prices. Gasoline price average grew by more than $4 per barrel this week compared to last week, and industry sources said this would significantly affect retail prices next week.

Diesel average price climbed by more than $3 per barrel over the same period.

Citing industry data, the sources said the benchmark Dubai crude rose by almost $3 per barrel to nearly $110 per barrel on June 16-19 against the previous week’s average of $106.60.

That was in the wake of militant Sunni group Islamic State of Iraq and Syria’s takeover of large areas of north and northwest Iraq, including the 300,000 barrel-perday Baiji refinery. Located 250 kilometers north of the capital city of Baghdad, it is the largest refinery in Iraq and the refinery supplies nearly a third of domestic requirements.

While fuel products available in the Philippines are refined from Saudi crude oil, conflict in any oil producing country drives prices up in spooked markets, according to Energy Secretary Carlos Jericho L. Petilla.

Most of the Philippines’ fuel materials are imported, making the commodity highly vulnerable to international price shocks.