Sharper increases in local pump prices are expected to weigh heavily on motorists next week as Western sanctions on Russia may raise oil prices to as much as $200 per barrel.
According to analysts at Oslo-based consultancy firm Rystad Energy, the projected spike in oil prices is based on the assumption that the ban on Russian oil would remove about 4 million barrels per day from the global market, which would worsen the current supply constraints.
Major oil firms in the country are projected to implement higher price hikes next week if the relentless rally in oil prices continues until the end of the week.
Latest price monitoring reports from the Department of Energy showed that the highest quotations for gasoline, diesel and kerosene in Metro Manila as of March 3 were already at P76.99, P65.45 and P69.69 per liter, respectively.
Energy Secretary Alfonso Cusi said these rates could go up to as high as P100 per liter once oil prices hit $200 a barrel.
Between March 4 and March 7, oil prices already increased by $12 per barrel. Usually, for every dollar change in oil prices, the impact on local pump prices is between P0.27 and P0.30 per liter, while for every one peso fluctuation in the US dollar exchange rate, the change in fuel rates may be between P0.13 and P0.15 per liter.
Analysts predict fuel price further upward movements by the end of the week.
“There is no sign of relief for the current oil price rally,” said OilPrice in its latest analysis. “[US President Joseph] Biden’s announcement of a ban on Russian energy imports, including oil, coal and liquefied natural gas, has only added to the upward pressure in oil markets.”