Oil prices on hefty spikes again next week (Sabong News)

After just a week of rollback, prices at domestic petroleum pumps will be on hefty upticks again by Tuesday, March 29, due to renewed cost upswings in the world market. Based on estimates of the oil companies, diesel prices will climb by as much as P7.95 to P8.15 per liter while kerosene prices will also be on significant increase of P8.10 to P8.30 per liter. Of the three commodities with weekly price swings, gasoline will have leaner hike of P2.90 to P3.10 per liter, partly due to softer demand for this product especially in the regional market. Oil companies are adjusting their prices on a weekly basis mainly based on the movement of the Mean of Platts Singapore (MOPS), the regional pricing benchmark adopted by the players in the country’s deregulated downstream oil sector. This is already the 13th week of oil price adjustments in the country, comprising of 12 price increases and just one episode of rollback last March 22. The first quarter average of Dubai crude, the pricing reference for Asian markets, had been hovering at $100 per barrel, way above the $80 per barrel threshold prescribed under the Tax Reform for Acceleration and Inclusion (TRAIN) Act,the basis for the automatic suspension of excise taxes for petroleum products. In the Revenue Regulation issued by the Bureau of Internal Revenue (BIR) when the TRAIN Law was enforced in 2018, it was stipulated that excise taxes on fuel “shall be suspended when the average Dubai crude oil based on MOPS, for three months prior to the scheduled increase of the month, reaches or exceeds $80 per barrel.” As of this writing, there are no definitive statements yet from the government, including the Department of Energy (DOE), if the excise tax suspension will already be implemented automatically next month if the price increases will continue. If the excise taxes will be temporarily scrapped, consumers can expect reduction of P10 per liter for gasoline products; P6.00 per liter for diesel products; P4.00 per liter for kerosene; and P3.00 per kilogram for liquefied petroleum gas (LPG) products. From January to March this year, Dubai crude trading prices had been ranging from mid-$90 per barrel in January to February; and then it climbed above $100 per barrel this March. As of Friday (March 25) trading, Dubai crude was inching close to $112 per barrel. Global experts noted that the new wave of rally in world oil prices had been due to the renewed threat sparked off by Russian President Vladimir Putin on European oil and gas markets because of the protracted Russia-Ukraine war; and that has been aggravated by other geopolitical factors, such as the damage on the oil export facilities of Kazakhstan and a missile attack on an oil terminal of Saudi Aramco. Given these intervening factors, international benchmark Brent crude had escalated again beyond $120 per barrel as of end-week trading; hence, the price hikes that will torment consumers’ pockets again in the coming days