By Sheldeen Joy Talavera, Reporter
MOTORISTS are finally getting a much-needed break after weeks of hefty increases, because the Department of Energy expects pump price rollbacks, with diesel prices seen dropping by at the very least P20 per liter (/l).
Energy Secretary Sharon S. Garin said that diesel prices may go down by at the very least P20.89 per liter, gasoline by P4.43 per liter, and kerosene by P8.50 per liter starting Tuesday, April 14.
“It’s based on the typical of the last five days of international prices and comparing that to the typical of the previous week,” she wrote in a Facebook post on Sunday.
Ms. Garin said that while not all gas stations have the identical pump prices, the projected rollback represents the minimum expected reduction.
If realized, this is able to be the primary rollback in diesel prices this 12 months. This might pull down diesel prices to around P150 per liter.
The Iran war, now in its second month, has sent global oil prices soaring and has disrupted oil supply chains. The Philippines, a net oil importer, is facing heightened price pressures amid volatility in the worldwide markets.
Industry sources earlier said global oil prices declined after US and Iran agreed to a ceasefire to finish the nearly six-week war.
While this offers temporary relief, analysts warned that volatility and uncertainty are more likely to persist as de-escalation stays unclear.
The US and Iran failed to succeed in an agreement to finish their war despite marathon talks that concluded on Sunday within the Pakistani capital Islamabad, jeopardizing a fragile ceasefire.
All sides blamed the opposite for the failure of the 21-hour negotiations to finish fighting that has killed hundreds and sent global oil prices soaring because it began over six weeks ago.
Traffic through the Strait of Hormuz, which is used to transit one-fifth of world oil and gas supply, stays at a fraction of prewar levels, in response to Reuters.
“Without the reopening of the Strait of Hormuz and credible assurances that business vessels can transit safely, global oil flows are unlikely to see meaningful improvement,” Jun Hao Ng, assistant economist for Asia Macro at Oxford Economics, told BusinessWorld.
He added that disagreements and uncertainty surrounding the ceasefire are emerging, heightening concerns about continued disruptions.
Meanwhile, consumers may additionally expect further reduction in pump prices if President Ferdinand R. Marcos, Jr. will exercise his power to suspend the excise tax on fuel.
Signed on March 25, Republic Act No. 12316 grants the President the authority to suspend or reduce excise taxes on petroleum products. The law takes effect on April 13.
A suspension of fuel excise tax collection could lower pump prices by P6 per liter for diesel and P10 per liter for gasoline.
Jose Enrique “Sonny” A. Africa, executive director at think tank IBON Foundation, said fuel excise tax suspension will give immediate relief to around 21 million low-income households.
“The bulk poor and vulnerable Filipinos will get the total relief from cutting oil excise taxes if producers go through the relief they feel in the costs they charge, which will probably be higher ensured if the federal government takes the crisis more seriously and declares an actual state of national emergency to trigger price controls under the Price Act,” Mr. Africa told BusinessWorld.
He said fuel excise tax must be suspended for good, as oil taxes are regressive and do little to significantly reduce fuel consumption.
“Revenues are higher generated with more progressive direct income and wealth taxes, and oil overdependence is healthier reduced by expanding public mass transport, promoting EVs (electric vehicles), and particularly increasing public investment in renewables,” Mr. Africa said. — with reports from Reuters