DUE to the escalation of the conflict in Iraq, industry players and the Department of Energy (DOE) are expecting another round of oil price hikes this week.
According to Energy Usec. Zenaida Monsada, the impact of the continued increase of crude prices in the international market is equivalent to more than a peso per liter hike in local pump prices.
She said that the spreading conflict has stoked fears of oil supply disruptions that could shut in millions of barrels of oil.
The production of crude oil is feared to be affected by the violence since the Baiji refinery, Iraq’s largest, is located in areas now under the control of the militant Sunni group Islamic State of Iraq and Syria.
Industry sources, who refused to be identified, said pump prices are expected to increase by more than P1 per liter this week due to the escalating crisis in Iraq.
The Baiji refinery is producing 300,000 barrel-per-day and supplies nearly a third of Iraqi domestic requirements.
Iraq produces 3.3 million barrels of crude oil daily and is the second largest producer in the 12-member Organization of Petroleum Exporting Countries or OPEC. It is also the third largest exporter of crude oil after Russia and Saudi Arabia
Last week, five oil firms simultaneously increased the prices of their products.
Petron, Shell, PTT, Seaoil and Phoenix Petroleum raised the price of gasoline by P0.20 per liter, diesel by P0.30 per liter and kerosene by P0.55 per liter.
The recent price adjustment was attributed by oil firms to movements in the world market caused by the escalating conflict in Iraq.