By Sheldeen Joy Talavera, Reporter
THE DEPARTMENT of Energy (DoE) is ready to tighten fuel price guidance as fresh developments within the Middle East threaten to drive pump prices higher, its top official said.
Energy Secretary Sharon S. Garin said that renewed tensions within the Middle East are putting upward pressure on global oil prices amid concerns over possible supply disruptions.
“Threats to navigation through the Strait of Hormuz have underscored the vulnerability of certainly one of the world’s most crucial energy trade corridors, placing upward pressure — prices have gone up again — on international crude oil prices, and consequently, domestic pump prices are affected,” she said at a briefing on Monday.
Reuters reported oil prices surged greater than 3% on Monday after renewed military strikes between the USA and Iran reignited concerns over energy shipments through the Strait of Hormuz.
“If things are still volatile, then we are going to not set a hard and fast range… It’s either a rollback or hike,” Ms. Garin said.
“For the reason that prices still appear to be very volatile, we decided here within the DoE that next week we are going to prescribe a selected number, not a variety.”
For this week, the DoE still gave a variety of price adjustments that can take effect on Tuesday. Fuel retailers can implement a rollback of not less than P1 per liter or a rise of as much as P1 per liter for gasoline. Prices of diesel and kerosene are set to extend by as much as P4.62 and P4.22 per liter, respectively.
Seaoil Philippines, Inc. and Shell Pilipinas Corp. have announced they’ll raise the value of gasoline by P1 per liter, diesel by P4.60 per liter, and kerosene by P2.30 per liter.
For the reason that Philippines was placed under a national energy emergency in late March, the DoE has prescribed a variety for weekly fuel price adjustments, setting a minimum rollback and a maximum increase that oil firms may implement.
Nonetheless, because the international market began to stabilize, the federal government gave greater flexibility to fuel retailers by allowing them to regulate prices inside a variety.
Ms. Garin said that they had earlier prescribed a variety for pump price adjustments to make sure the viability of oil firms.
The Philippines is especially vulnerable to global oil price shocks since it is a net importer of petroleum products, most of which come from the Middle East. The conflict between the US and Iran has heightened concerns over possible disruptions to shipments through the Strait of Hormuz, a critical oil transit chokepoint, raising supply risks and driving up global crude prices.
Asked to comment on DoE’s oil price outlook, Top Line Business Development Corp. Senior Vice-President and Chief Operating Officer Brigitte Carmel C. Lim said the recent escalation within the Middle East and chronic risks from the Russia-Ukraine conflict proceed to cloud the outlook for the worldwide oil market.
“These developments could make global oil prices (and consequently local pump prices) volatile within the near term,” Ms. Lim told BusinessWorld. “For now, we remain cautiously optimistic, but much will rely upon how these geopolitical events evolve over the approaching weeks.”
As of July 10, the country’s fuel inventory is such as 47.84 days, increasing from 46.50 days previously.
The typical inventory for gasoline is 48.17 days, while diesel has a mean inventory of 45.69 days. Kerosene has a mean inventory of 148.98 days, 80.09 days for jet fuel, 33.37 days for fuel oil, and 39.51 days for liquefied petroleum gas.