Fuel prices seen going up on New Year’s Eve

FILE PHOTO

MANILA, Philippines—Diesel and gasoline prices are up for one last jump at the pump before 2013 ends on Tuesday as consumers meet the New Year with deferred electricity bill hikes and looming fare increases for overhead train services.

Industry sources said the price increases may be imposed in the morning of Dec. 31. The estimates range from P0.85 to P1.15 per liter for gasoline and from P0.60 to P0.80 for diesel.

Excluding this anticipated adjustment, the year-to-date net increase for major fuel products are at P3.93 per liter for diesel and P2.44 per liter for gasoline.

Year-on-year, gasoline prices for late December grew by 0.3 percent or about P2 across products and diesel by 5 to 10 percent or an average of P3 on a range of products, according to data from the interdepartmental “Price Monitoring Charts” report.

In the trading week of Dec. 23 to 27, crude trended higher in Asia on supply fears in Africa and surprisingly strong oil demand in the US.

Overall, an industry source said, nothing “serious” has happened but traders’ sentiment on tighter supply expectedly drove prices.

Asked for comment, Energy Secretary Carlos Jericho Petilla said: “It (local oil industry) is deregulated and the problem of oil price spikes is not local to the Philippines but rather a worldwide problem. The more we gear away from oil dependence, the better we are.”

Unfortunately, Supertyphoon Yolanda’s rampage in Eastern Visayas, which supplies 15 percent of the country’s coconut oil exports, has threatened the drive for more biofuel, which the Department of Agriculture supports to help the Philippines’ curb oil imports.

Abroad, there are concerns that political violence in South Sudan, which restarted oil production in April 2013 after a year of border skirmishes with neighbor Sudan, could escalate to a civil war and disrupt supply.

Pushing up prices were fears about prolonged oil strikes in OPEC (Organization of the Petroleum Exporting Countries) member Libya, where groups of militias, tribesmen, and civil servants have seized key oil fields and ports as leverage for political and financial demands.

In the US, foreign buying was seen to drive gasoline and diesel demand, propping up fuel prices. Diesel understandably enjoys robust winter sales as heating oil but a fresh report on US supply also indicated falling stocks for gasoline. Traditionally, US gasoline inventories build up in the cold months as motorists keep their cars in the garage. And since American crude comes cheaper than the Brent, the international benchmark, analysts have pointed at foreign influence on US demand.

Recently, the Supreme Court ordered the Manila Electric Co. to stop implementing a record P4.15/kWh increase in pass-on power generation and related charges.

Meanwhile, the public consultations on the proposed MRT3/LRT fare increases (LRT Line 1 Baclaran to Roosevelt: P30 from the present P20; LRT Line 2 Recto to Santolan: P25 from P15; MRT Line 3 Taft to North Avenue: P28 from P15) ended in a stalemate in mid-December and government has yet to decide on the matter.

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