As July enters its first week, fuel budgets are not really favorable to consumers, as oil prices are expected to rise again this week, especially for gasoline-based products, although a hiatus is scheduled for kerosene-based products.
As inferred from the oil companies‘ initial calculation, prices will increase from P 0.55 to P 0.65 per liter for regular gasoline products; while premium gasoline will result in higher adjustments of P1.00 to P1.10 per liter.
Conversely, diesel prices are likely to remain at current prices or increase only very slightly by 0.05 to 0.10 P per liter; while kerosene can also be stable or have a decline from P0.05 to P0.10 per liter.
Oil companies will implement the new round of price adjustments scheduled by Tuesday, July 6, in line with the cost movement routine to which the deregulated downstream oil sector was already accustomed.
Next week’s mixed price swings will follow last month’s five-week cycle of pernicious price hikes; and experts predict that the upward trends may continue in the weeks and months to come.
Industry players have cited a sustained rally in global oil prices; as well as the escalation in the value of the US dollar against the local currency among the factors that precipitated the upward adjustments in domestic pump prices.
Experts noted that the lack of a firm decision from the Organization of the Petroleum Exporting Countries (OPEC) and its allied producers on the prospects for increased production at their July 1 meeting – due to reported disagreements on the basis of production quotas – had so far not helped to alleviate the state of “overheating” of the oil market.
Last week, the greenback was steadily rising and fell only slightly as of Friday, July 2, following the release of US non-farm payroll (NFP) data; but what counterbalanced that was the resurgence of growing Covid-19 infections in various parts of the world due to the more deadly Delta variant.
For an economy heavily dependent on oil imports like the Philippines, the double whammy of the rise in the value of the US dollar and soaring global oil prices could trigger a pernicious shock to the purchasing power of its consumers, because they will pay more when they fill their vehicles at the pump.
Beyond that, the surge in the prices of petroleum raw materials is also exerting inflationary pressure on the cost of basic products as well as on transport prices, which could further encumber household budgets.
There had been consistent forecasts of increased demand after the wider reopening of economic activities in ‘superpower countries’, but the forbidding threat of the Delta variant of Covid could also slow the economic rebound, particularly in the regions. jurisdictions that have a slower vaccination rate.
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