Motorists should brace for another hike in fuel prices this week as oil prices in the global market continue to rise, according to the Department of Energy (DoE).
Zenaida Y. Monsada of the DoE’s oil industry management bureau declined to give estimates although local oil firms are expected to make their announcements soon.
According to an industry source, diesel prices are expected to increase by as much as 50 centavos a liter, and for gasoline, P1 a liter.
From January 1 to February 14, gasoline prices increased by P3.60 a liter to range from P51.48 to P58.50. Diesel prices, on the other hand, went up by P2.15 a liter and ranged as of February 14 from P44.69 a liter to P48.28 a liter.
She explained that the expected price adjustment could be attributed to the tension brewing in Iran, which had threatened to cut off its supply to six European countries before the so-called oil embargo this July.
Iranian lawmakers are pushing a plan to halt crude exports to Europe before the European Union begins an oil embargo on July 1. The embargo is part of a broader strategy by Western nations to pressure Iran to abandon its nuclear program.
Also putting pressure on local fuel prices are the increase in the consumption of gasoline by the United States, as seen in its declining stockpile, as well as the appreciation of the peso against the US dollar. With the persistent weak energy demand in Europe, coupled with higher oil prices, the Organization of Petroleum Exporting Countries (OPEC) decided to cut its 2012 forecast for growth in global oil demand.
OPEC expects demand this year to hit 88.76 million barrels a day, down from its forecast a month ago of 88.90 million.