Pump prices are on the rise as oil firms implement for the seventh consecutive week another round of price adjustment.
In separate announcements, oil companies said Monday that gasoline prices will go up by P1.30 per liter, diesel by P1.50 per liter and kerosene by P1.45 per liter.
Seaoil, Pilipinas Shell, Petron, Caltex, Total Philippines, PTT, Phoenix Petroleum and Unioil said they will implement their price adjustments effective 6 a.m. of October 12. Other oil firms are expected to follow suit.
Cleanfuel, meanwhile, will adjust its prices at 4:01 p.m.
This week’s oil price hike will result to the year-to-date adjustments to stand at a total net increase of P17.85 per liter for gasoline, P16.50/liter for diesel and P14.19/liter for kerosene.
Oil firms, which adjust prices every week, said the price adjustment reflects movements in the world oil market.
“The reason for the hefty oil price increase is the same as last week. There is insufficient supply of crude oil versus demand,” said Oil Industry Management Bureau (OIMB) of the energy department Director Rino Abad in a text message.
He explained that the Organization of the Petroleum Exporting Countries Plus (Opec+), which consists of the 13 Opec members and 10 of the world’s major non-Opec oil-exporting nations, did not accede to the request of US, India, China and European countries to provide additional supply over and above the 400,000 staggered increase per month from August this year to April next year.
Abad explained that the Opec+ member countries collectively agree on how much oil to produce, which directly impacts the ready supply of crude.
The Department of Energy (DOE) said current supply could not serve demand.
“Aggressive demand in the fourth quarter is seen to reach as much as 103 million barrels of crude oil per day while supply is only about 100.32 million barrels per day. Clearly, this Platts projection shows a supply deficit of around 2.91 million barrels per day,” it said.
Energy Secretary Alfonso Cusi reminded oil firms to comply with Executive Order 134, which requires oil companies and bulk suppliers to maintain a sufficient minimum inventory of petroleum.
“I am directing all oil companies in the country to ensure adequate supply, and come up with plans to mitigate possible price hikes of oil products in the coming months,” Cusi said.
He reminded oil firms to comply with the Minimum Inventory Requirements (MIR) under Department Circular 2003-01-001.
The circular states that all oil companies, except refiners operating in the country, and bulk suppliers maintain a minimum inventory equivalent to 15 days worth of petroleum products’ supply, except for liquefied petroleum gas (LPG).
Oil refiners are required to maintain MIR equivalent to 30 days worth of supply, consisting of petroleum crude oil and refined petroleum products.
Also a seven days worth of supply must be maintained for LPG.
“The DOE will continue to closely monitor global oil supply and price movements. As always, we are working with the downstream oil industry players to ensure that all mechanisms to protect our consumers against the impact of such developments as much as possible,” Cusi said.