|
By Euan Paulo C. Añonuevo, Reporter
After cooking-gas prices went up P0.50 per kilo
Friday, liquefied petroleum gas (LPG) suppliers announced yet
another increase in June—this time by at least P3 per kilo.
It gets worse.
Small oil companies also on Friday said pump
prices are poised to go up—P1.50 per liter for diesel and P1 per
liter for gasoline.
Arnel Ty, LPG Marketers Association president,
said that starting next month—which is just a week away—the
public should expect “the highest increase for LPG” because of
higher contract prices in the world market.
He added that prices may see an increase of at
least P3 per kilo in light of this, pushing the price of an
11-kilogram LPG cylinder to more than P650.
Data from the Department of Energy showed that
as of May 17, the prevailing price of an 11-kilo tank has been
hovering between P575.50 and P627.25.
The LPG Marketers Association accounts for about
a quarter of the cooking gas market in Luzon, and carries such
brands as Omni Gas, Pinnacle Gas, Island Gas, Cat Gas and Nation
Gas.
Although large oil firms have yet to make an
announcement as of press time, they are expected to follow suit.
Industry officials pointed to the soaring prices
of crude in the world market as the culprit behind the increasing
price of cooking gas, as LPG is made during the process in which a
barrel of oil is turned into petroleum products.
The contract price for LPG rose to $855.50 in
May, up by $43.50 from the previous month.
Aside from high crude prices, a number of
petrochemical firms in the region are starting to use LPG as
feedstock for their operations because of the increasing price of
naphtha, causing an increase in demand.
Gasoline to go up
Oil firms on Friday confirmed previous reports
of a looming hike of pump prices after their under-recoveries
ballooned from about P7 per liter at the start of the month to P10
per liter.
“We have no choice. It’s a matter of
survival,” said Fernando Martinez, Eastern Petroleum Corp.
president. He is also chairman of the Independent Philippine
Petroleum Companies Association, whose members are small oil
companies.
Martinez said his company increased its diesel
prices by P1.50 per liter and P1 per liter for gasoline effective
Friday. Other oil firms are expected to follow suit, because of the
petroleum industry’s deregulated environment.
He added that some oil firms have already
started to enter into allocations, supplying only existing and loyal
clients and dealers, to allow them to cope with the high crude
prices by stretching their inventories, instead of buying oil
products at the current extremely high prices.
World oil prices
Crude oil prices jumped higher in London on
Friday to trade just below $132 a barrel, just $3 away from record
highs reached this week on concerns that supplies will not meet
demand.
New York’s main oil futures contract, light
sweet crude for July delivery, rose $1.12 to $131.93 a barrel.
In London, Brent North Sea crude for July
delivery grew $1.42, also to $131.93 a barrel.
On Thursday, Brent struck an all-time high of
$135.14 and New York crude reached a record $135.09, before both
contracts slid as investors banked profits.
“While we do expect this bubble to burst, and
make no mistake about it, this bubble will burst, we are not ready
to say yesterday’s profit-taking selloff was the start of the
correction,” said the latest daily Schork Report on energy markets
published Friday.
Oil prices have risen more than fourfold in five
years, when the New York benchmark rose, underpinned by Chinese
demand for crude.
They reached $100 for the first time in January,
crossed $120 a barrel at the start of May, and $130 on Wednesday
after government data showed US energy inventories surprisingly fell
last week.
Oil prices are also being supported by unrest in
oil-producing countries, OPEC’s unwillingness to hike output, and
a weak dollar that makes commodities priced in the US unit cheaper
for foreign buyers. OPEC is the Organization of Petroleum-Exporting
Countries.
“With the surge in oil prices starting to look
increasingly like a speculative mania, further increases are likely
in the short term as more and more speculative capital is sucked
into the vortex created by rising prices,” said Shane Oliver,
chief economist of AMP Capital Investors in Sydney.
Oil at $150 a barrel “is now just a few weeks
trading away,” he said.
With supply struggling to meet demand, oil at
$300 per barrel “is not inconceivable on a five-year horizon,”
Oliver added on Friday.
Algeria’s Energy minister and OPEC president,
Chakib Khelil, said Thursday that falling production in non-OPEC
countries, such as Russia, has contributed to the spectacular rise
in global oil prices.
Meanwhile, Abdala El-Badri, OPEC
secretary-general, said cartel members were unhappy with surging
prices that he blamed on speculators and a weak US dollar.
OPEC, which produces 40 percent of the world’s
oil, is reluctant to bend to US-led demands for it to increase
production to help cool rocketing prices.
The 13-nation cartel insists that the market is
well supplied and that record prices reflect speculative investment
activity, rather than actual supply and demand conditions.
-- With AFP
|
