Big-time fuel price rollback seen next week

Motorists can expect a sigh of relief as pump prices of petroleum products are expected to roll back big-time in the coming week.

Citing oil trading monitoring in the past four days (August 1 to 4), based on the Mean of Platts Singapore (MOPS), an oil industry source told GMA News Online that a price per liter of diesel may be reduced by P1.70 to P2.00 per liter.

Gasoline prices, meanwhile, may be slashed by P1.50 to P1.80 per liter.

The projected pump price adjustments are still subject to change depending on the movement on Friday’s trading, according to the oil industry source.

The local oil industry uses MOPS, the daily average of all trading transactions between buyers and sellers of petroleum products as assessed and summarized by Standard and Poor’s Platts.

In its fuel price forecast for the August 9 to 15 trading week, Unioil Petroleum Philippines said diesel prices were projected to go down by P2.00 to P2.20 per liter while gasoline prices may be reduced by P1.90 to P2.10 per liter.

Sought for comment, Department of Energy-Oil Industry Management Bureau Director Rino Abad confirmed that there is an expected rollback in both gasoline and diesel of more than P1 per liter.

Abad said the global crude market is feeling the effect of the recent monetary policy tightening implemented by the US Federal Reserve late last month.

The US Federal Reserve hiked its key policy rate by 75 basis points to help tame inflation.

Monetary policy or interest rates are among the tools used by central banks to stabilize inflation through controlling money supply by raising borrowing costs.

Higher borrowing costs could make consumers and businesses spend less, therefore reducing economic activity or lowering demand and eventually lowering prices.

READ: Higher policy rates: How are you affected?

Oil companies usually announce price adjustment every Monday to be implemented on the following day.

Effective Tuesday, August 2, fuel firms hiked the price per liter of gasoline by P0.75 and rolled back diesel by P0.60 per liter.

The latest price changes brought the year-to-date adjustments to stand at a net increase of P19.65 per liter for gasoline and P32.35 per liter for diesel.

Data from the DOE as of August 2 to 2 showed the price per liter of gasoline range from P67.15 to P78.56 in Quezon City - the largest city in Metro Manila - while gasoline prices range between P72.70 and P77.15 per liter in Manila - the country’s capital city. —NB, GMA News