If the decreasing trend in oil prices continues until today, a significant reduction in local pump costs is expected to give temporary comfort to Filipino consumers next week.
In an interview with the Inquirer on Thursday, Fernando Martinez, chair of the Independent Philippine Petroleum Companies Association and Eastern Petroleum Corp., indicated that diesel prices might drop by as much as P12 per liter next week.
Given the volatility of the global oil market, he observed that this could quickly be reversed by developments in the current crisis between Russia and Ukraine.
“The computation as of yesterday is that [the rollback] could be P12 [a liter] for diesel. If the movement of (oil) prices would be the same as the first three days of this week, more or less it can be P12,” he said.
Martinez told radio station dzBB that the rollback was P2 to P3 a liter as of Wednesday this week but may alter by Friday.
Local pump rates range from P70 to P80 per liter, depending on the grade. Gasoline and diesel prices have risen by P20.35 and P30.65, respectively, since January.
Big rollback in local pump prices possible next week
The Mean of Platts Singapore (MOPS), the daily average of all trading transactions between buyers and sellers of refined petroleum products as described by Standard and Poor’s Platts, a Singapore-based market wire service, is used as a benchmark for local fuel prices.
Because the remaining local refineries have capacities that are less than national oil demand, the Philippine oil sector has stopped basing local pump prices on crude. Instead, the industry imports completed products over half of what is needed in the country.
Analysts typically release gasoline price forecasts on Friday or the weekend to cover the full trading week.
According to industry estimates, every dollar decline in oil costs will decrease P0.27 to P0.30 per liter. Another element affecting pump pricing is the peso-dollar exchange rate, which, according to industry estimates, can reduce local pump prices by P0.13 to P0.15 per liter for every P1 shift in the currency.
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