Oil firms to cut prices Tuesday

MANILA, Philippines — Consumers are set to enjoy a fuel price rollback this week following mixed adjustments last week, reflecting a volatile market.

Major oil firms Petron and Shell announced Monday that they would cut prices from 12:01 a.m. September 30, by P0.10 per liter of gasoline, and kerosene as well as P0.20 per liter of diesel.

Seaoil, arguably the country’s largest independent oil player, is implementing the same adjustments for gasoline, kerosene, and diesel as the giants at 12:01 a.m. Tuesday.

Other independent oil firms said in separate advisories that they would implement the same rollback rate for gasoline and diesel. PTT Philippines will roll back its prices at 12:01 a.m. on Tuesday (Sept. 30) while Phoenix Petroleum Philippines said it would start at 6 a.m., also on Tuesday.

Other firms have not made formal announcements but are expected to adjust prices similarly since most of the fuel products in the Philippines are imported and are thus vulnerable to similar supply-demand and foreign exchange forces.

Year-to-date total adjustment for gasoline was at a net decrease of P2.13 per liter while prices for diesel were at a net decrease of P3.80 per liter.

The fuel price cuts mirrored yet again the uncertainty that has been gripping the international oil market, with Iran reported to be urging fellow oil producing countries to do something to halt the current oil price slide.

Supply remained stable for the most part this year and demand seemed unpredictable for large consumers such as the U.S. and China. While the U.S. is a fuel-guzzling economy, its recent success in fuel production put downward pressure on prices. The U.S. oil production also enables it to put Russia in check over incursions into Ukraine.

Analysts predicted more rollbacks for the rest of the year as benchmark Brent crude is seen to trade at $90 per barrel by the end of next year from its present trades at $92 to $93.

Over the weekend, Russia’s government passed what analysts called a “tight” budget reminiscent of the global financial crisis. Oil and gas provide about half of Moscow’s revenue, which means there is a great risk to Russia’s development amid uncertainty over crude prices. The budget was apparently balanced with the assumption of $100 per barrel for Brent, which usually trades at a slight premium to Urals (Russia’s chief blend).

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