Fuel price rollback next week uncertain due to conflicting factors

Initial expectations of a rollback in fuel pump prices in the coming week became uncertain due to conflicting factors affecting petroleum trading in the international market.

Department of Energy-Oil Industry Management Bureau Assistant Director Rodela Romero on Friday said oil trading in the past four days “gives uncertainty on the amount of adjustments in the prices of petroleum products.”

Citing industry estimates, Romero said the price per liter of gasoline may have “no change or increase of P0.10 or rollback of P0.10.”

For diesel, a price reduction of P0.20 to P0.40 may be expected.

Kerosene, likewise, may have “no change or rollback of P0.10 [per liter].”

Nonetheless, Romero said the estimates will change after the completion of the Friday Mean of Platts Singapore (MOPS) trading.

MOPS is the basis for pricing of refined petroleum products in Southeast Asia. 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.

“The primary reason for the rollbacks is the forecast of US DOE Energy Information Administration that US crude production will rise in 2024 and 2025 and will offset to some extent the OPEC+ production cut,” Romero said. 

The same forecast, however, indicated that there will be a global oil deficit of 260,000 barrels per day (bpd) this year and a surplus of 360,000 bpd in 2025, according to the Energy official.

“However, factors that pull oil prices up are the increase in oil demand of the US and India and the drop in US crude inventories,” Romero said.

“Also, the attack made by Ukraine to the four largest Russian refineries in a single day contributed to the increase of oil prices or to the lowering down of the amount of the expected rollbacks,” she said.

Oil companies regularly announce price adjustments every Monday which will be effective on the following day.

Effective Tuesday, March 12, fuel firms slashed the per liter prices of gasoline, diesel, and kerosene by P0.50, P0.25, and P0.30, respectively.

The latest price movements brought the year-to-date adjustments to stand at a net increase of P5.45 per liter for gasoline and P3.80 per liter for diesel. Kerosene, on the other hand, recorded a year-to-date net decrease of P0.25 per liter. —KBK, GMA Integrated News