Oil prices forecast to increase this week
Local pump prices are expected to increase this week and continue their rally due to an improving global economic recovery and rising tensions in Middle East.
Energy Secretary Carlos Jericho L. Petilla explained in a briefing Monday that the price increases could be attributed partly to rising demand given the economic recovery particularly in the United States, which is the biggest consumer of fuel products.
“The trend is that world prices are going up. The peso appreciation is not really enough to offset rising demand. [The increases in local pump prices] could have been worse if the peso is depreciating against the dollar. The crisis in the Middle East is also affecting oil prices,” Petilla explained.
“Our consumption is very low that’s why we cannot dictate prices. We’re price takers, we have to follow the global oil pricing. We cannot negotiate with suppliers because [our consumption] is too small to affect prices unlike the US or China. That’s why we are monitoring their progress,” he added.
Local oil companies, however, have yet to make their respective announcements as of 4 p.m. yesterday. This would be the third straight week that firms will be increasing local oil prices.
As of Feb. 5, diesel prices ranged from P40.35 to P42.70 a liter while gasoline retails for P49.50 to P56.04 a liter.
Meanwhile, Petilla disclosed that rising ethanol prices due to tight supply were also putting pressure on fuel prices. It is expected that the high ethanol prices in the global market this February would hike local pump prices next month by about 40 centavos a liter (based on the 10-percent blending of ethanol in gasoline products).
So far, the Department of Energy is reviewing possible measures to ease the impact of rising fuel prices on motorists and the commuting public, including a second round of the Pantawid Pasada Program, which the government implemented last year.
“We will [see] if we still need to do this. We cannot do this forever because the subsidy should only be temporary. We cannot sustain a subsidy form of mitigating rising oil prices,” Petilla said. “Rather than fight [rising oil prices], the thing we can do in the long term is to look for more oil deposits in the area and encourage drillers. We are promoting compressed natural gas and looking at liquefied natural gas as a substitute for fuel-fed buses,” the energy chief explained.
The DOE is also promoting the massive use of electric vehicles for public transport, Petilla added.