Fuel price hikes seen higher than earlier forecast

AFP FILE PHOTO

MANILA, Philippines—Pump prices may rise more than initially expected, petroleum industry sources said on Monday, citing updated market reports.

Sources said the first major upward adjustment for 2015 could be “around P2” for gasoline, and not the estimated P1 to P2 range as of the weekend.

Diesel prices, on the other hand, are forecast to increase by P1 to P1.50 per liter.

Since the start of the year, there has been a net decrease of P3.60 per liter for gasoline and P4.16 per liter for diesel.

Speculative trading has driven prices up, however, a source said, due to weak US economic data and concerns that oil drilling activities would be curtailed. It will be recalled that there have been recent reports of oil majors cutting capital expenditures in 2015, raising concerns on oil output.

Violence in Libya, an OPEC member and home to Africa’s largest oil reserves, also supports price hikes. So does the perception of strong demand from China due to a relaxation of its reserve requirements, another source said. Riza T. Olchondra