MANILA, Philippines—Motorists should brace themselves for steeper-than-usual gasoline price hikes this week.
Phoenix Petroleum Philippines was the first to announce increased pump prices—P1.25 per liter for gasoline and P1 for diesel starting 6 a.m. Tuesday. Eastern Petroleum quickly followed suit, announcing a P2 increase for all products effective the same time.
Energy Undersecretary Jose M. Layug Jr. warned in an interview Monday that there would be “unusually higher increases” this week due to fears that the unrest in Libya would continue and spill over to other oil-producing countries, disrupting the fuel supply.
An industry source claimed a P2-per-liter hike may be in the offing, unless oil firms choose to stagger the fuel price increases.
Layug did not disclose the computations of the Department of Energy (DoE) but made an appeal to theoil companies over dzIQ radio to implement the hike in tranches to cushion the impact for motorists.
An earlier DOE report quoted Victor Shum, senior principal of Purvin and Gertz energy consultants in Singapore, as saying that “geopolitical tensions in the crude-rich Middle East keeps oil prices generally higher, as traders worry over the potential for supplydisruption.”
Prices of Dubai crude as of Monday already passed the P100 mark, reaching $104-$105 a barrel, according to Layug.
The energy official, however, noted that Saudi Arabia had assured buyers that it had adequate buffer stocks to tide over demand until the Libyan conflict is resolved.
Even the Organization of Petroleum Exporting Countries gave its assurance that there would be sufficient supply to address global demand in the short and medium term.
To further ensure the stability of the fuel supply in the country, the DOE said it would require all oil companies to double their inventories—from 15 days’ to 30 days’ worth of supply.
The country’s daily fuel consumption is estimated at about 300,000 barrels.
“We want to prolong that and have a buffer stock,” Layug said in a phone interview.
Two of the biggest players in the downstream oilindustry, Pilipinas Shell Petroleum Corp. and Petron Corp., have assured the DoE that tensions in Libya should not be a cause for worry.
The Philippines sources its crude mostly from Saudi Arabia, United Arab Emirates, Qatar, Oman and Iran.
Last year, the Middle East accounted for 81 percent of crude imports, the Association of Southeast Asian Nations, 12 percent; and Russia, 7 percent.
Refined petroleum products, on the other hand, come mostly from neighboring Asian countries, particularly Singapore, except for liquefied petroleum gas, which comes mostly from Saudi Arabia, Qatar and the United Arab Emirates.
Last week, the DoE released an Oil Contingency Plan to prepare the country for possible disruptions in oil supply in case the unrest in the Middle East and North Africa continue.
According to the DoE, the plan is composed of three phases: predict, prepare and perform. These three phases cover strategies ranging from preparation to actual response, should any supply disruptions materialize.
Reaction:
The news also makes my heart ache because my parents also use vehicle. it affects the use of it because of the increase of it. Vehicle are transportation help my parents to travel at ease.
This increase is because of the trouble happening in Libya. We all know that we cant do anything but pray for the people who are their especially filipino's that are caught up in the civil war. Hope they will settle it the safest way.
