AP FILE PHOTO
MANILA, Philippines–Local fuel companies raised prices on the last week of the year in what industry observers described as just a “blip” since they generally believe oil prices will continue to slide well into 2015.
Petron raised its gasoline price by 30 centavos per liter and kerosene by 10 centavos a liter at 6 a.m. Tuesday. There was no change in diesel prices. Shell, Chevron and Seaoil raised their gasoline and kerosene prices at the same level earlier at 12:01 a.m.
The price movements brought the total year-to-date net decrease in fuel products to P11.54 per liter for gasoline and P13.48 per liter for diesel.
Analysts said that despite the slight hike, prices would likely remain below $70 a barrel or drop even lower, unlike at the beginning of 2014 when prices were at the $100-barrel level.
They said it would take many producers curbing output or leaving the market before the supply dives low enough against demand to push prices up.
Investors might also suspend new oil well drillings, but as long as they have cash flow, they will keep pumping wells they developed over many years, even if prices are down.
On the plus side, the overall drop in prices has virtually stopped oil smuggling and eased the overall cost of doing business due to cheaper transport costs, among other things.
Energy Secretary Jericho L. Petilla said in an interview that reports of smuggling were down lately. He hoped investors would thus focus on new energy projects which could be in production by the time commodity prices went up again.
Independent Philippines Petroleum Companies Association and Eastern Petroleum Corp. president Fernando Martinez said that now was the time for oil firms to think about stockpiling inventory and investing in facilities that could help them be on the upswing when oil prices finally climb steadily.
Energy Undersecretary Zenaida Monsada said, “While we are happy for consumers because they can spend more with the low oil prices, we also hope oil firms will think long term and invest in facilities while the cost of doing business is low.”