Free fall in world oil prices cuts PH’s import bill

LOWER prices of crude oil in the global market significantly slashed the country’s oil import bill in the first nine months of 2015 to only $6.5 billion from the $10.8 billion recorded in the same period the previous year.

This was despite an increase in the volume of imports, which rose by 11.5 percent to 108 million barrels in the same period from only 96.86 million barrels imported a year ago, data from the Department of Energy (DOE) showed.

Of the 108 million barrels, 47.2 percent or 50.98 million barrels were crude imports while the remaining 52.8 percent or 57 million barrels were petroleum products.

A 39 percent increase in the volume of crude oil and petroleum exported, however, pulled down the country’s export earnings by 27.5 percent to $698 million in the same period last year. DOE data showed total export volume in the first nine months last year reached 12.2 million barrels.

The country’s net oil imports—or crude and petroleum product imports minus exports—thus reached $5.829 billion as of end September last year, lower compared to the $9.837 billion posted in the same period in 2014.

The continued free fall in global oil prices is expected to benefit an oil importing country like the Philippines in the short term, including lower costs of production, transport and logistics, and electricity.

Melita V. Obillo, officer in charge of the Oil Industry Management Bureau at the DOE, earlier said the country remained in a comfortable position in terms of prices and supply, with the hope that the geopolitical tensions in the Middle East will be contained. Oil prices may reverse its current trend by the middle of the year, but the increases may be gradual.

The Department of Trade and Industry earlier asked the private sector to cut the suggested retail prices (SRPs) of basic necessities and prime commodities relative to the decrease in fuel prices.

Data from the DOE showed that retail prices of oil significantly declined in 2015, corresponding to a 25.81 percent price drop in diesel, 13.12 percent in fuel oil, and 4.27 percent in household liquefied petroleum gas (LPG).