Pump prices slashed anew, but excise spoils revelry

Independent oil firms announced one of the largest price cuts before the new year kicks in as crude oil prices remained on a downtrend that is set to continue in the next three months.

Seaoil Philippines, Unioil Petroleum and Phoenix Petroleum slashed pump prices of diesel for the twelfth week in a row, this time by P1.80 per liter.

They also reduced prices of gasoline by P1.30 per liter. Seaoil decreased prices of kerosene for the twelfth straight week as well, this time by P1.90 per liter.

If major players follow suit before Tuesday, this would put prices of diesel and gasoline lower—respectively by P1.55 per liter and P2.50 per liter—than at this time last year, excluding excise that was imposed on Jan. 1.

Incorporating the taxes, diesel would have gained just P1.25 per liter over the past year and gasoline only 47 centavos.

Tomorrow, a second tranche of taxes under the Tax Reform for Acceleration and Inclusion Act will impose an additional P2.24 per liter for both diesel and gasoline—P2 excise plus 24 centavos value-added tax.

The Department of Energy, however, reminded oil firms that 2018 inventories should be sold without applying the second tranche of the excise.

According to the Economic Forecast Agency (EFA), which specializes on long-range financial market forecasts for corporate clients, prices of the international benchmark Brent crude would continue to fall month after month in the first quarter of 2019.

As of this writing, Brent was trading at $53.21 per barrel and the EFA expects it to end the year at $51.59 a barrel.

The agency also predicts Brent to end January at $50.96, February at $47.80 and March at $44.84 before recovering in April to $47.62.

By the end of 2019, the EFA said Brent crude would be trading at $60.32 per barrel, or close to $9 more than its end-2018 forecast.

Earlier this month, the International Energy Agency said the recently announced pact among the Organization of the Petroleum Exporting Countries (Opec) and their non-Opec allies to reduce their collective output by 1.2 million barrels a day had helped put “a floor under” crude prices.