Fuel price hike seen this week

MANILA, Philippines–Local oil prices are expected to stay on an upward trend, with major fuel products set to become more expensive this week.

Petron, Shell, Chevron, Seaoil, Phoenix Petroleum, PTT Philippines, TOTAL and Eastern Petroleum are expected to raise gasoline prices by 50 centavos per liter and diesel by around P1 per liter, industry sources said.

Excluding this week’s adjustments, the price of gasoline has increased by P4.02 per liter while that of diesel has risen by P1.04 per liter since January.

The oil firms have not made formal announcements but are expected to implement similar price adjustments as most of the country’s fuel is imported, exposing the companies to similar market factors.

Last week, the oil firms raised the price of gasoline by 95 centavos, diesel by 65 centavos, and kerosene by 50 centavos per liter.

Oil industry stakeholders remain cautiously optimistic, however, noting that supply might still temper an oil price hike.

One area under close watch among traders is Iran.

Sanctions have strangled the Mideast country’s oil industry, but if a nuclear deal is reached and the sanctions are diluted or shelved, Iranian exports are bound to rise, they said.

When that happens, prices may either stabilize or even drop, depending on other developments such as US output and consumption, economic growth in fuel-guzzling industrialized economies, foreign exchange rates (which affect import prices of countries such as the Philippines), and overall market sentiment.