Big-time oil price hike takes effect this week

Marje Pelayo   •   December 30, 2019   •   1205

MANILA, Philippines – Oil companies are set to impose big-time oil price hike this week.

Shell announced that effective 6:00 AM Tuesday (December 31), it will impose an additional P0.80/L on gasoline; P0.50/L on diesel and P0.35/L on kerosene.

Unioil, meanwhile, said it will add P0.45/L to P0.55/L to the price of diesel and P0.85/L – P0.95/L to gasoline.

Oil firms clarified, however, that the price adjustment does not include the impending excise tax on fuel set for 2020.

Industry players said the oil price hike follows price adjustment in the world market.

House panel supports DOE’s appeal to amend oil deregulation law

Maris Federez   •   October 25, 2021

MANILA, Philippines — The House Committee on Energy supports the suggestion of the Department of Energy (DOE) to amend the oil deregulation law.

The DOE believes that amending the law is the only solution to curb the consecutive increases in the price of petroleum products.

The panel also wants the government to closely look into the reasons for the price hikes being implemented by oil companies.

It also wants the government to be given the power to solve such price hikes.

House Committee on Energy chairman Representative Juan Miguel Macapagal Arroyo said oil companies should not use the oil deregulation law as a blanket authority to increase the price of their products at the expense of the consumers.

“I welcome the proposal of the DOE to amend the Oil Deregulation Law after oil prices escalated over the past eight weeks. As chairman of the House Committee on Energy, I have long pushed for a special mechanism to prevent overpricing in emergency situations,” Arroyo said.

“The Oil Deregulation Law does not give oil companies blanket authority to take advantage of consumers,” he added.

Bayan Muna Partylist Representative Carlos Zarate, meanwhile, urged the DOE to support House Bill 4711 which aims to amend the said law.

“We now challenge Department of Energy Sec. Alfonso Cusi to ask Pres. Duterte to certify House Bill 4711 to again regulate the downstream oil industry as well as the unbundling of oil prices that we called to be done since 2018,” Zarate said.

In an interview, Cusi said that he had already written the Department of Finance to suspend the imposition of the excise tax on petroleum products.

The House panel said it will set a hearing on the said amendment and would invite representatives from the DOE and the DOF. —/mbmf (from the report of UNTV Correspondent Nel Maribojoc)

Oil prices up for 9th straight week

Robie de Guzman   •   October 25, 2021

MANILA, Philippines – Local pump prices of petroleum products will go up anew this week, oil firms announced on Monday.

In separate advisories, Pilipinas Shell Petroleum Corp. Chevron Philippines Inc. (Caltex), Seaoil Philippines Inc., and PTT Philippines said they will increase prices per liter of gasoline by P1.15, diesel by P0.45, and kerosene by P0.55.

Cleanfuel and Petro Gazz will also implement the same price adjustments, excluding kerosene.

The new round of oil price hike will take effect on Tuesday, Oct. 26.

Other oil companies have yet to make similar announcements.

This is the ninth straight week of oil price adjustment.

The Department of Energy (DOE) earlier said that the prolonged oil price spike is due to continuing rise in world market prices resulting from the sudden global increase in demand and an unanticipated lack of supply.

The DOE added that the increase in demand and prices is attributed to the following:

  • The surge of economic activities due to the containment of COVID-19 as a result of measures adopted and implemented worldwide (i.e. mass vaccination, control of the Delta and other variants, Europe’s “no-lockdown” policy, and China’s economic boost). This led to a sudden demand in energy utilization, including the demand on oil products in the transportation sector like gasoline and diesel;
  • The stocking of petroleum products’ inventories as winter approaches to cover demand from October this year to March of next year, with stocking expected until February 2021;

 

  • Slowed production due to the current global direction of sourcing energy from low-carbon emitting sources. This has limited the optimum level of production, causing the halt and event withdrawal of investments in the development and expansion of the fossil fuel industry;

 

  • International sanctions to oil-producing countries like Iran and Venezuela that stopped the drilling of oil companies and the buying of oil products from these countries;

 

  • Hurricane Ida a category 4 storm that hit the US gulf coast on August 29 had caused an estimated loss of US crude oil production by as much as 30 million barrels.

The DOE said that the Organization of Petroleum Exporting Countries (OPEC) will meet on November 4 to discuss and reassess the situation.

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DOE asks Congress to amend Oil Deregulation Law

Robie de Guzman   •   October 20, 2021

The Department of Energy (DOE) has called on Congress to amend provisions in the Oil Deregulation Law to allow the government to address oil price hikes amid high global demand and tight supply.

In a letter addressed to Senator Sherwin Gatchalian and Pampanga Representative Juan Miguel Arroyo, the DOE asked Congress to amend the law “to provide a framework for the government to intervene in the sudden, prolonged oil price spikes, including the unbundling of the cost of petroleum retail products to determine their true and passed-on costs.”

Gatchalian chairs the Senate Committee on Energy, while Arroyo heads the counterpart panel in the House of Representatives.

The DOE cited several reasons for the prolonged oil price spike amid continuing rise in world market prices resulting from the sudden global increase in demand and an unanticipated lack of supply.

It said that the demand, which is estimated at 103.22 million barrels a day (as of October 16, 2021 vs. a supply of 100.32 million barrels/day) is attributed to the following:

  • the surge of economic activities due to the containment of COVID-19 as a result of measures adopted and implemented worldwide (i.e. mass vaccination, control of the Delta and other variants, Europe’s “no-lockdown” policy, and China’s economic boost). This led to a sudden demand in energy utilization, including the demand on oil products in the transportation sector like gasoline and diesel;

 

  • the stocking of petroleum products’ inventories as winter approaches to cover demand from October this year to March of next year, with stocking expected until February 2021;

 

  • slowed production due to the current global direction of sourcing energy from low-carbon emitting sources. This has limited the optimum level of production, causing the halt and event withdrawal of investments in the development and expansion of the fossil fuel industry;

 

  • International sanctions to oil-producing countries like Iran and Venezuela that stopped the drilling of oil companies and the buying of oil products from these countries;

 

  • Hurricane Ida a category 4 storm that hit the US gulf coast on August 29 had caused an estimated loss of US crude oil production by as much as 30 million barrels.

 

Before the pandemic, the latest recorded total worldwide supply was, more or less, 104 barrels a day.

To cope-up with the supply, the DOE said the Organization of Petroleum Exporting Countries (OPEC) committed to increase the production and supply of crude oil by 400,000 barrels/day.

The OPEC will meet on November 4 to discuss and reassess the situation.

The DOE said the Philippines utilizes the equivalent of 425,000 barrels/day, which is around 0.4% of the world supply.

The department assured it has met with the oil industry stakeholders to ensure supply while the problem persists, and asked if discounts could be extended to the public, especially to the public transport sector.

“Supply was assured and some companies (e.g. Jetti, Seaoil, Shell, Phoenix, Unioil) agreed to extend discounts to the public transport industry on top of existing discounts currently given like vaccination and loyalty incentives,” it added.

The DOE said it required the unbundling of the cost of retail products to determine their true and passed-on cost.

It maintained that the unbundling of oil prices would result in greater market transparency by establishing the trends in the prices of oil and finished petroleum products.

This, in turn, would help ensure a level playing field within the oil industry, while upholding the best interests of consumers, the DOE said.

 

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