Oil prices higher by more than P1

Oil companies are implementing today over P1 per liter increases of on fuel products after global crude prices spiked above $80 per barrel and the peso weakened further against the dollar last week.

This is the second consecutive week that petroleum firms raised pump prices.

Oil firms raised prices for gasoline by P1.60 per liter, diesel by P1.15 per liter and kerosene by P1.00 per liter.

Eastern Petroleum, Flying V, Petron Corp., Pilipinas Shell Petroleum Corp., Phoenix Petroleum Philippines Inc., PTT Philippines Corp., Seaoil Philippines Inc. and Total Philippines Corp. implemented their respective price adjustments at 6 a.m. today.

UniOil Petroleum Philippines Inc. said its price increase would take effect at 6:01 a.m.

Petron Corp. has yet to announce its price changes as of yesterday afternoon.

During last week’s trading, Brent crude soared to $80 per barrel after Venezuela production dropped, a strong global demand and looming US sanctions on Iran, Reuters reported. This is the first time global crude prices zoomed beyond $80 per barrel since November 2014.

The peso also depreciated further against the dollar, staying above the P52:$1 level.

Energy Secretary Alfonso Cusi said his agency is studying measures to mitigate further increase in fuel prices in light of the major price hikes.

“We are studying options like suspension of excise tax on fuel, increase in existing fuel discount to public utilities (land), expedite price unbundling, energy conservation and efficiency, development of indigenous sources, and vouchers for PUB (public utility buses) in coordination with DOTr (Department of Transportation), among others,” he said in a text message.

He added that “there is a mechanism on the implementation of excise tax when oil price reaches certain level” as he called on everyone to conserve fuel and use energy efficiently.

The Tax Reform for Acceleration and Inclusion (TRAIN) Act imposed hefty excise tax increases on gasoline from P4.35 per liter to P7 per liter while new tax rates of P2.50 per liter were imposed on diesel, P3 per liter on kerosene, and P2.50 per liter on auto liquefied petroleum gas (LPG).

However, there is a provision in the law that the TRAIN taxes on fuel products will be suspended when benchmark crude oil prices hit $80 per barrel for a period of three months.

Spiraling oil prices have been blamed for the highest inflation rate in years recorded in the first quarter of 2018. Economic managers, however, oppose the suspension of the fuel excise tax.