MANILA, Philippines – The oil companies announced a substantial drop in gasoline prices effective Monday with smaller rollbacks for diesel and kerosene in the wake of a stronger peso and easing market jitters over the war in Syria.
Petron and Shell were to push back pump prices for gasoline by P1.60 per liter (including VAT) effective one stroke after midnight on Sunday or early Monday. Diesel and kerosene prices were to fall at more modest rates of P0.80 per liter and P0.85 per liter, respectively.
Although other companies had not made any announcements as of Saturday, they tend to track each other’s prices.
With Monday’s price cuts, the year-to-date net increase in gasoline would be be P1.94 per liter while that of diesel would be P3.28 per liter.
International oil prices fell in the wake of US-Russia meetings in Geneva on the prospects of Syria giving up its chemical weapons and having a transitional government. That and a stronger peso (which hit a one-month high on September 11) suggested prices may soften in the Philippines since nearly all of the country’s fuel products are imported.
The local currency closed Friday at P43.86 against the US dollar, a slight gain from P43.89 on Thursday.
However, oil prices did not plunge drastically in light of the lower output from the Organization of the Petroleum Exporting Countries, whose supplies averaged 30.32 million barrels per day in August, down from a revised 30.50 million barrels per day in the previous month, according to the Department of Energy’s Oil Monitor.
Also holding up prices were upward revisions in Japan’s second-quarter growth data and a surprise surge in Chinese factory output in August, boosting hopes of economic recovery in the world’s No. 2 economy after the U.S., which continued to stoke oil demand.
The Oil Monitor also said that Russian President Vladimir Putin’s continued support of Syria and news that the U.S. Federal Reserve would keep its economic stimulus measures in place longer than expected pushed prices up in the previous week.
In the Asian market, Platts said the region’s gasoline may “find support” from US benchmark gasoline prices although regional fuel prices had been stable to bearish in previous weeks.
Syria is not a major source of crude oil but its proximity to—and relations with— major oil producers such as Saudi Arabia, Iran, and Kuwait make it a market to watch for fuel traders. Syria is also strategically located in a region which pumps more than a third of the world’s oil supply. The Bay of Iskenderun in Turkey, which is near the border with Syria, is a major export route for crude from Iraq and Azerbaijan.