A “big-time” increase in pump prices is looming as crude cost spiked in the international market last week.
According to an industry source, local prices of petroleum products are expected to rise by an average of P2 per liter this week.
Once implemented, this would be the first major price adjustment for the year.
The projection was caused by a surge in Asian benchmark Dubai crude, increasing by an average of $7.50 per barrel over the previous week.
The increase can be attributed to weak US economic data and the announcement of oil majors that they will cut capital expenditures for 2015.
“This has fueled speculation that reduced investments will curb crude oil production,” the source said.
For February, Dubai crude is averaging $52 per barrel, which is 14 percent higher than the January average of $45.50 per barrel.
After the steep rise in crude prices, the source said Mean of Platts Singapore (MOPS) gasoline increased last week by US$8.50 per barrel as against the previous week’s average.
The Philippines is using MOPS as the benchmark for local fuel products.
“Gasoline was supported by possible strikes in several US refineries ahead of the summer driving season,” the source said.
Gasoline is averaging nearly $66 per barrel in February as against January’s full-month average of just over $57 per barrel.
Asian diesel prices, meanwhile, increased by an average of $6 per barrel last week.
The increase was supported by lower stockpiles in Japan and demand from other Asian countries ahead of maintenance turnarounds at several refineries.
With these developments, the source said local pump prices are expected to rise in the range of P2 per liter this week.
Since the start of the second half of 2014 when international oil prices started to drop until the first week of February 2015, gasoline and diesel have decreased between P18 and P19 per liter.
In 2015 alone, gasoline prices have decreased four times totaling P3.60 per liter.
Diesel has been rolled back five times, amounting to a total of over P4 per liter.
Oil Industry Management Bureau director Zenaida Y. Monsada said the Department of Energy is strictly monitoring any price adjustments imposed by local oil firms.