Fuel prices drop anew

INQUIRER FILE PHOTO

MANILA, Philippines–Oil prices went further downhill this week on weak international demand and stable supply. The latest adjustment on fuel prices follows five straight weeks of gasoline price cuts, which analysts say indicates overall softness in demand.

Petron, the country’s top oil player, and Chevron announced price cuts for gasoline (-P0.10 per liter), diesel (-P0.40 per liter), and kerosene (-P0.35 per liter) from 12:01a.m. on Tuesday, August 19. Petron and Chevron were the only local firms to have announced an adjustment on gasoline prices for this week.

Shell and Seaoil said in separate advisories that they will have trimmed the prices of diesel (by P0.40 per liter) and kerosene (by P0.35 per liter) from 12:01a.m. Tuesday. Thai-led PTT Philippines said it will implement a P0.40 per liter rollback on diesel only, also at 12:01a.m. Tuesday.

Phoenix Petroleum, one of the larger independent firms, is implementing a heftier adjustment for diesel with a P0.45 per liter decrease in the price of its diesel products starting 6 a.m. Tuesday.

Another independent oil player, Eastern Petroleum, will effect a P0.30 per liter rollback starting 12:01 a.m. Tuesday. Eastern Petroleum Group chairperson Fernando L. Martinez said in a phone interview that his company’s products are already priced lower at around P0.50 per liter than those of other brands.

A number of industry observers asked about the diverse price adjustments said that oil firms consider similar variables when computing changes from week to week, such as regional trading averages and foreign exchange rates. However, as one source put it, strategies could still come into play depending on their price points and market share.

Other oil firms are expected to also roll back diesel and kerosene prices since nearly all the fuel sold domestically are imported, making local pump prices vulnerable to international prices movements.

Including the price movements this week, the year-to-date total adjustments stand at a net decrease of P2.95 per liter for diesel and about P2.35 per liter for gasoline.

Asian market reports said global crude prices fell over the past week amid sufficient oil exports from Ukraine and the Middle East despite political and sectarian tensions.

The recent downtrend in fuel prices in general may also indicate weaker demand for crude, which tends to follow economic growth trends.

Fuel prices result from factors such as crude oil prices, processing and distribution costs, local demand, the strength of local currencies, local taxation, and the availability of local or regional supply.