WITH THE INVENTORY thinned to 38 days, the prices of diesel – the most commonly-used fuel for transportation, farm implements and other economic activities – could be pushed beyond P110 per liter, based on a government audit of private oil inventories in the country.
The figure, which is deemed by experts as “dangerously low level,” undercuts earlier projections that stocks would last through the end of April and Bilyonaryo’s source said diesel prices could rise to P105-P115 range.
Energy Secretary Sharon Garin confirmed that the country’s typical 60-day supply buffer has been eroded in just approximately two weeks.
She said the DOE is preparing for “worst-case scenarios” and coordinating with oil firms to ensure suppliers honor contracts — “There is available supply aside from the Middle East, but the question remains how much they are selling.”
Garin however reassured the public that most gas stations and diesel power plants remain stocked. “We have enough because the majority of our gas stations and diesel power plants are already sufficiently supplied,” the energy chief added.
Diesel prices could reach up to P115 per liter this week at gasoline stations within Metro Manila and nearby areas as a fresh wave of big-time price increases is set to be implemented amid the Middle East conflict, reported Business World.
“It’s possible. Actually, our estimate is that it could reach P115,” she told reporters.
Starting today, March 17, gasoline prices will increase by P12.90 to P16.60 per liter, diesel by P20.40 to P23.90 per liter, and kerosene by P6.90 to P8.90 per liter.
Based on DoE’s monitoring, gasoline prices may go as high as P91.60 per liter while diesel may surge to P114.90 per liter. Kerosene prices may jump to P143.79 per liter.(Ironically kerosene is the main fuel used in remote areas for cooking, lighting and other activities).
Several oil companies, including Shell Pilipinas Corp., Petron Corp., Total (Philippines) Corp., Seaoil Philippines, Inc., Flying V, and Jetti Petroleum, Inc., have agreed to stagger the implementation of the increase in two to three tranches within the week.
The latest price adjustments marked the 12th consecutive weekly increase for diesel and kerosene prices, and 10th straight week for gasoline.
“Today, we set a record. We have two of the highest jumps in oil prices. And (fuel prices) are also the most expensive,” Garin said.
Local pump prices remain elevated amid the ongoing US-Israel war with Iran, which led to the closure of the Strait of Hormuz, a chokepoint for one-fifth of the world’s oil.
As a net importer of crude oil, the Philippines is vulnerable to global crude price swings. Around 98% of the country’s crude imports are sourced from the Middle East. The remaining 2% is imported from Brunei and Malaysia.
While assuring that there is adequate supply until the end of April, Garin said, “there is no need to cause panic among our people.”
She then hinted at government efforts to negotiate for additional supply of fuel from other countries, including South Korea, Thailand, Singapore, and Japan.
The DoE has also tapped state-run Philippine National Oil Co. to search for alternative suppliers to stockpile as the country’s remaining oil refiner, Petron, is negotiating with Russia for supply of crude oil as the US eased sanctions on the latter.
“We’re waiting for that– on what is the progress– and talks on procuring from Russia, but we have already done the work.”
If she had her way, Garin would want to revisit the 1998 oil deregulation law, but to a certain extent.
“I do believe this system is only effective during good times. If prices are favorable for everyone, then things are fine. But in bad times, it does not work very effectively,” she admits.
Under the law oil companies can set and adjust pump prices based on global oil prices and other market factors, instead of awaiting government approval.
“In times like this, there has to be a certain control. Not because we want to limit profit or competition that is there, but we also want to protect the interest of the public,” Garin said.
The DoE chief also assured the country has a stable supply of electricity, but the consumption should be managed.
Last Monday, consumer group ILAW Pilipinas urged the government to implement immediate measures that could help cushion consumers from price shocks, including the suspension or reduction of local taxes and tariffs on fuel and electricity.
“A potential increase in electricity prices shows how quickly international conflicts can translate into higher costs for households and small businesses,” said ILAW Pilipinas Youth Convenor Francine Pradez.