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Monday, June 24, 2024

Fuel price hikes forecast next week as US pump consumption picks up

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The Department of Energy (DOE) projected a possible oil price hike next week of as much as P2 per liter for diesel due to the movement of prices in the world market.

Meanwhile, the Civil Aeronautics Board (CAB) said airline fuel surcharges are likely to go down in September as crude prices fall.

Based on the latest trading movement, DOE Oil Industry Management Bureau Director Rino Abad said diesel may go up by P2 per liter, kerosene by slightly more than P2 per liter, and gasoline by P0.50 per liter.

Abad said reports of increased US fuel consumption primarily drove this despite recession fears.

Reports that the US crude stocks declined by 7.1 million barrels last week also shored up oil prices.

The forecast oil price increase will end the second consecutive week of oil price rollback across all petroleum products and the seventh straight weekly oil price cut for diesel products.

A GMA News report cited an industry source saying that the price per liter of diesel “may increase by P2.00 to P2.20, while gasoline prices may go up by P0.10 to P0.30 per liter.”

The projected price adjustments are still subject to change depending on the results of Friday’s trading, according to the oil industry source, GMA News added.

Local oil firms cut the price of diesel by P1.05 per liter, gasoline by P0.10 per liter, and kerosene by P0.45 per liter on August 16.

These resulted in the total year-to-date adjustments at a net increase of P16.50 per liter for gasoline, P30.05 per liter for diesel, and P24.30 per liter for kerosene.

CAB Executive Director Carmelo Arcilla meanwhile said that effective Sept. 1, airline fuel prices “will go down by 26 percent, from level 12, it will go down to level 9. It may not be that high, but it’s significant.”

Arcilla, in an ABS-CBN News report, said airlines may collect a fuel surcharge of around P740 per passenger for a one-way domestic flight between Cebu and Manila under level 12.

“The surcharge will drop to around P520 under level 9, allowing a passenger to save some P400 for a round trip,” he added.

The applicable fuel surcharge is determined based on one month’s average of jet fuel MOPS (Mean of Platts Singapore) prices in its peso-per-liter equivalent, the CAB said.

According to reports, crude prices soared to $140 per barrel in early March after Russia invaded Ukraine and oil prices have dropped by a quarter since June.

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