Oil price hikes higher than expected (Sabong News)

The country’s oil companies have implemented higher than the earlier calculated price hikes mainly due to premium charges and escalating freight costs for their imported products, according to the Department of Energy (DOE). In pricing adjustment advisories sent to the media, oil companies increased gasoline prices by P3.40 per liter; P8.65 per liter for diesel; and P9.40 per liter for kerosene products. The price upticks this week had been higher by P0.30 to P0.50 per liter than the estimated price hikes if based on the fluctuation of prices in international market trading last week; and as reckoned on costs swing of the Mean of Platts Singapore (MOPS). According to the oil companies, they factored in additional P0.14 per liter for freight costs and P0.50 to P0.60 per liter for premium charges due to tight supply conditions in the world market, hence, the higher adjustments reflected at the domestic pumps. As of press time, industry players that already sent notices on their price increases include Pilipinas Shell Petroleum Corporation, Cleanfuel, PetroGazz, Seaoil, Chevron and Unioil; effective Tuesday (March 29). Other oil companies are expected to follow. The DOE said that oil companies only provided calculation on the freight cost adjustment and premium charges, but refused to provide further explanation because of pending court cases relating to the questioned policy on unbundling of fuel charges at the pumps. Given the ‘unexplained’ weekly pricing of the oil industry players, Congress has been expediting passage of the proposed legislation that will enforce the unbundling or segregation of cost items of the oil companies. This way, consumers can be properly apprised of the charges they have been paying every time they will fill up their vehicles at gasoline stations. The proposed bill already secured initial approval from the House Committee on Energy, but the Senate counterpart does not have appetite at this point to fast-track the measure’s deliberations and passage. The relentless seesaw in prices portend continuing unpredictability of cost fundamentals in global oil markets. Consumers are also being warned that they may need to live with escalated oil prices for several months more. As of Monday, March 28 trading, international benchmark Brent crude eased a bit to $117 per barrel from last week’s high of $120 per barrel while Dubai crude had been roughly steady at $111 to $112 per barrel.