Pump prices for domestic oil products may rise anew—after three straight weeks of rollbacks—if China lifts its COVID-19 lockdowns and the United States Federal Reserve does not push through with its planned interest rate hikes, an Energy Department official said Tuesday.
“There’s a possibility this situation will happen, as the supply side is still very tight. There’s a slim difference in supply against demand,” Rino Abad, Department of Energy director for the Oil Industry Management Bureau said in a briefing.
China, one of the world’s biggest consumers of oil products, has been battling a surge in coronavirus cases and has imposed lockdowns as part of its zero-COVID policy.
“If the surge in demand returns, pressure will resume on supply, and will reverse the trend and most likely lead to (price) increases again,” Abad said in Filipino.
Pump prices have gone down for three consecutive weeks due to the US interest rate hikes and recession fears.
Abad said the US Federal Reserve plans to review its policy rate during a meeting on July 26 to 27.
According to a report by Reuters, US Federal Reserve officials may stick with a 75-basis-point interest rate increase during their meeting.
“They are considering their decision on the interest hikes. If they do that, other Central Banks will follow, and there will be global action. When that happens, that will be favorable because the rollback will continue,” Abad said.
On Tuesday, local oil firms cut the pump price of gasoline by P5 per liter, diesel by P2 per liter, and kerosene by P0.70 per liter to reflect the movement of prices in the world market.
Phoenix Petroleum Philippines decreased the prices of diesel by P2 per liter and gasoline by P5 per liter effective 6 AM of 19 July 2022, it said in its advisory.
PTT Philippines, Chevron Philippines, Seaoil Philippines, PetroGazz, Cleanfuel, Unioil Petroleum Philippines, and Flying V also announced price cuts.
Unioil announced over the weekend that fuel prices would go down during the week of July 19 to 25 by P1.90 to P2.10 per liter for diesel and P4.60 to P4.80 per liter for gasoline.
On July 12, oil companies decreased the prices of gasoline by P5.70 per liter, diesel by P6.10 per liter, and kerosene by P6.30 per liter.
These resulted in the year-to-date adjustments at a net increase of P24.30 per liter for gasoline, P36.80 per liter for diesel, and P30.05 per liter for kerosene.