Fuel prices are expected to continue rising this week although at a slower pace given the substantial increases recently, industry sources said. INQUIRER FILE PHOTO
MANILA, Philippines—Fuel prices are expected to continue rising this week although at a slower pace given the substantial increases recently, industry sources said.
Respondents to an informal survey by the Inquirer estimated the price increases this week to range from P0.25 to P0.90 per liter on fuel products.
“Demand is subsiding hence the lower price hikes of P0.25 to P0.35 for diesel and P0.80 to P0.90 for gasoline,” Eastern Petroleum president Fer Martinez said via text message when asked to comment on the price trend. Martinez is also the chair of the Independent Philippine Petroleum Companies Association.
Other industry sources had varying estimates, some slightly lower and others about the same as those of Martinez.
Department of Energy officials did not respond to requests for comment on the matter.
Generally, price resistance sets in at certain levels, energy experts said. Since price hikes in the last few weeks were substantial, traders cashed in on their gains with more sales, neutralizing projected higher demand and price this week.
However, since the Philippine market is but a drop in the global market for oil, outside developments such as political volatility in the Middle East and North Africa (Mena) are expected to still greatly influence local prices. Syria and Egypt are not oil-producing but fears of spillover disturbance in oil producing countries and oil roads tend to spook markets, driving prices up.
Gasoline is additionally vulnerable due to the summer driving season in the US (top gasoline consumer) and continued growth in the Chinese economy (No. 2 global consumer).
Platts global director Jorge Montepeque said at a recent forum that international fuel prices were softening before the political crisis hit Egypt but fears of a supply crunch has since driven prices up. Egypt is located centrally in the Mena region and further escalation of violence could affect supply from major pipelines of oil suppliers, according to experts.
Fuel price volatility has had the Department of Energy supporting moves for possible quarterly fare adjustments based on price movements. Energy Secretary Jericho Petilla has told reporters at the same Platts forum that such a scheme has been suggested to the Department of Transportation and Communications and is up for them to take up or not. Petilla noted, however, there was feedback that fuel prices are deregulated while fare prices are regulated.