The Department of Energy (DOE) is appealing to oil companies to extend discounts to frontliners amid rising fuel pump prices.
“I am appealing to our partners in the industry, the oil companies, if possible, [to] give fuel discount to our frontliners in the face of the hardships due to the pandemic,” he said, adding that the rising prices of oil in the world market is beyond the agency’s control.
The DOE said continued recovery in world demand has resulted in a global supply-demand balance crude oil deficits of 370,000 and 140,000 barrels per day (b/d), respectively, in the first and second quarters of 2021.
Based on reports, this market sentiment will continue to develop, with projected increasing demand versus ongoing supply restrictions from the Organization of the Petroleum Exporting Countries (OPEC) and United States’ sanctions against Iran and Venezuela, which are all seen to be the underpinning factors pointing to sustained price increases for the rest of the year.
The DOE cited high demand, insufficient increase in supply and continuing US sanctions as among the reasons for high world oil prices.
Local oil firms adjust their prices weekly based on movements in the international oil market.
Platts Analytics’ projections for the third quarter of the year shows an increasing demand. The increase in demand is expected to be around 5.98 million b/d of crude oil higher than the second quarter.
Also, the projected increase of around 5.98 million b/d for the third quarter will not be fully covered by the projected increase in supply.
The projection shows that the non-OPEC countries will increase their supply only by around 830,000 b/d, while OPEC countries have agreed only to increase their production by around 800,000 b/d for the third quarter (400,000 b/d installment per month for the month of August and September). This imbalance for the third quarter is expected to result to a projected insufficiency of crude oil global supply by around 4.35 million b/d.
Further to the ongoing OPEC crude oil supply restriction, around 2 million b/d from Iran and 700,00 b/d from Venezuela remain restricted due to US sanctions. These additional supplies could have helped eased the insufficiency of supply.
“We call on all members of the energy family in ensuring the unhampered delivery of services during the ECQ. Towards this end we had earlier issued and continue to issue the necessary credentials that would allow our industry players to provide essential energy services throughout the country,” added Cusi.