Oil prices to be cut Tuesday

By: Riza T. Olchondra - 10 years ago

MANILA, Philippines — Oil firms are cutting prices of fuel products for the second straight week as global supply remains stable.

Effective 12:01 a.m. Tuesday (October 7), Petron is cutting diesel and kerosene prices by P0.35 per liter, as well as gasoline prices by P0.15 per liter. “These reflect movements in the international oil market,” the country’s top oil player said in its official advisory.

Shell, another major oil firm, is adjusting its prices at the same time. Shell said in an advisory that its rollback would reach P0.35 per liter for kerosene, P0.30 per liter for diesel, and P0.10 per liter for gasoline.

Seaoil has also announced it will cut diesel and kerosene prices by P0.35 per liter, as well as gasoline prices by P0.15 per liter, starting 12:01 a.m. Tuesday.

PTT Philippines has said it will adjust prices at 12:01 a.m. on Tuesday, as well, but only for diesel (P0.35 per liter) and gasoline (P0.15 per liter) since it does not carry kerosene products.

Phoenix Petroleum Philippines will implement the same adjustments as those of PTT Philippines but at a later time: 6 a.m. 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 P2.28 per liter while prices for diesel were at a net decrease of P4.15 per liter.

Low oil prices, analysts said, were due to the combined effects of stable global supply, U.S. dollar (which has made buying commodities cheaper), and lower demand among fuel-guzzling economies such as the U.S. (which has recently started tapping its own oil and gas fields).

Brent crude, the global benchmark, has dropped around 20 percent in the past quarter after breaching the $100-per-barrel level in June, industry observers said.

The extended oil price cuts are driven by demand uncertainty in the international oil market amid a still fragile world economy — prompting some oil producing countries to consider cutting back on output to defend prices at $100 per barrel.