DoE says price cuts due to world fuel cost drop by as much as $10
Pump prices are likely to go down by P4 a liter for diesel and P3 a liter for gasoline next week after world oil prices declined by as much as $10 per barrel, the Department of Energy (DOE) said Thursday.
Rino Abad, DOE director for the Oil Industry Management Bureau, said the decline in world oil prices will likely to offset the impact ofthe peso’s depreciation against the US greenback.
From June 27 to July 1, the Philippine peso depreciated week-on-week against the US dollar by P0.56 to P54.97 from P54.41 the previous week.
The peso further depreciated to P56.06 versus the US dollar on Thursday.
Abad attributed the drop in world oil prices to ongoing concerns over US interest rate hikes.
Meanwhile, concerns of a slowdown in global economic demand also affected oil prices.
The DOE said world oil prices remained volatile amid concerns of supply tightness and recession fears.
On July 5, the oil companies cut diesel prices by P3 a liter and kerosene by P3.40 a liter. Gasoline prices did not move.
These adjustments brought net increases of P42.90 per liter for diesel, P36.35 per liter for kerosene and P30 per liter for gasoline since the start of the year.
President Ferdinand Marcos Jr. met with key Energy officials Thursday to address the continued rise in oil prices. No details of the meeting were released, however.
The meeting came two days after Marcos said he planned to expand the coverage of the government’s fuel subsidy to public transport operators and drivers by including tricycle drivers.
The Department of the Interior and Local Government (DILG) earlier announced that over 600,000 tricycle drivers nationwide will be receiving a fuel subsidy.
The Land Transportation Franchising and Regulatory Board (LTFRB) began releasing cash subsidies for other public transport operators and drivers in March.
The President has yet to name an Energy secretary.
Also on Thursday, Senator Sherwin Gatchalian expressed reservations about suspending the excise tax on oil products to cushion the effects of skyrocketing fuel prices brought about by the Russian invasion of Ukraine.
Gatchalian said the government stands to lose P160 billion in revenue if the excise tax on fuel is suspended.
“We really need to study the proposal carefully because if we look at the news, it seems that there is no end to the situation in Ukraine,” he said.
Senator Grace Poe has refiled a bill seeking to amend the National Internal Revenue Code (NIRC) and providing rules for the automatic suspension of the excise tax on gasoline and diesel.
Under her proposal, the collection of excise taxes on gasoline and diesel will be automatically suspended when the average Dubai crude oil prices based on the Mean of Platts Singapore exceeds $80 per barrel over a period of three months.
She said the suspension of excise tax will immediately bring down the cost of gasoline by P10 per liter and diesel by P6 per liter.
“Taking off P6 from the price of diesel per liter during critical times can help our drivers ply their routes again. At the same time, it will lower the cost of transporting goods,” she said.
Senator Aquilino Pimentel III has also filed a bill to suspend the imposition of the value-added tax on fuel.