By Sheldeen Joy Talavera, A reporter
DEPARTMENT OF ENERGY (DoE) is set to stabilize the price of fuel direction as new developments in the Middle East threaten drive higher pump prices, says its chief executive.
Energy Secretary Sharon S. Garin said renewed tensions in the Middle East are putting upward pressure on global oil prices amid concerns about supply disruptions.
“The threats to navigation in the Strait of Hormuz have emphasized the vulnerability of one of the most important energy trade corridors in the world, which puts high pressure – prices have risen again – on international crude oil prices, and as a result, domestic pump prices are affected,” he said at a press conference on Monday.
Reuters reported that oil prices rose more than 3% on Monday after renewed military strikes between the United States and Iran rekindled concerns about energy exports through the Strait of Hormuz.
“If things are still unstable, we will no longer set a fixed range… Either postpone or climb the mountain,” said Ms. Garin.
“Since the prices still seem to fluctuate a lot, we have decided here at the DoE that next week we will set a certain number, and we will not count anymore.
This week, the DoE has offered a range of price adjustments that will take effect on Tuesday. Gasoline dealers can charge back at least P1 a liter or go up to P1 a liter of gasoline. Diesel and kerosene prices are set to increase to P4.62 and P4.22 per liter, respectively.
Seaoil Philippines, Inc. and Shell Pilipinas Corp. announced that they will increase the price of gasoline by P1 per liter, diesel by P4.60 per liter, and kerosene by P2.30 per liter.
Since the Philippines was placed under a state of national emergency in late March, the DoE has determined the range of weekly fuel price adjustments, setting minimum rollbacks and maximum increases that oil companies can use.
However, as the international market began to stabilize, the government gave fuel traders greater flexibility by allowing them to adjust prices within a range.
Mrs. Garin said that they had previously mentioned how they would adjust the price of the pump to ensure the efficiency of the oil companies.
The Philippines is highly vulnerable to global oil price shocks because it exports oil products, mostly from the Middle East. The conflict between the US and Iran has raised concerns about possible disruptions in the movement of goods through the Strait of Hormuz, an important chokepoint for oil transport, raising supply risks and increasing crude oil prices around the world.
Asked to comment on the DoE oil price situation, Top Line Business Development Corp. Senior Vice President and Chief Operating OffIcer Brigitte Carmel C. Lim said the recent escalation in the Middle East and the ongoing dangers from the Russia-Ukraine conflict continue clouding the outlook for the global oil market.
“These developments could make global oil prices (and therefore local pump prices) more volatile in the near term,” Ms Lim said. BusinessWorld. “For now, we remain very optimistic, but much will depend on how these geopolitical events unfold in the coming weeks.”
As of July 10, the country’s fuel price is equal to 47.84 days, up from 46.50 days earlier.
The average inventory for gasoline is 48.17 days, while diesel has an average inventory of 45.69 days. Kerosene averages 148.98 days, jet fuel 80.09 days, 33.37 days of fuel oil, and 39.51 days of making liquids petroleum gas.
