Business

All oil firms implement hefty cut in pump prices

All oil firms implement hefty cut in pump prices

By Myrna M. Velasco

The prices of gasoline and kerosene products at local pumps will be reduced this week by ₱3.50 per liter; and diesel by ₱2.00 per liter, according to the price adjustment advisories sent by the oil companies.

This is another week of hefty price rollbacks – although Filipino consumers would not be able to fully benefit from it because most are staying home because of the enforced 30-day quarantine in Metro Manila and the rest of Luzon to flatten the spread of the virulent coronavirus.

As of press time, the oil firms that already announced price cuts include Pilipinas Shell Petroleum Corporation, Seaoil, PTT Philippines, Total and Chevron; while the rest of the industry players are anticipated to follow.
Phoenix Petroleum jumped the gun on its competitors and implement similar prices cuts last Friday.

There is a prevailing price freeze on key petroleum products – primarily liquefied petroleum gas (LPG) and kerosene that are essential commodities in Filipino households.

Nevertheless, it was clearly stated in the Department of Energy (DOE) announcement that despite the price freeze, rollbacks shall be implemented for the specified products (kerosene and LPG).

For LPG in particular, pricing adjustments will be due by April 1 – and this is also anticipated to have massive cuts given recent price swings in the world market.

Meanwhile, AFP reported from Singapore yesterday that oil prices fell at the open in Asia on Monday after a trillion-dollar Senate proposal to help the coronavirus-hit American economy was defeated and death tolls soared across Europe and the US.

US benchmark West Texas Intermediate initially tumbled more than three percent but then pulled back some ground to trade 1.5 percent lower, at $22 a barrel.
Brent crude, the international benchmark, fell 4.9 percent to $25 a barrel.

Prices have fallen to multi-year lows in recent weeks as lockdowns and travel restrictions to fight the virus hit demand, and top producers Saudi Arabia and Russia engage in a price war.

In last week’s trading, the price of Dubai crude, which is the benchmark for Asian oil refiners, had skidded to US$27 per barrel, which by far was US$4.0 to US$5.0 per barrel lower than the previous trading week.

The worry of the international market now is the continuing precipitous slide in prices that may nosedive to as low as US$10 per barrel – given the extremely shrinking demand due to constricted movement of global population.

The oil markets would be among those seen extremely battered as the world continues to grapple with the uncertainties foisted by the relentlessly spreading novel coronavirus which had practically stalled economic and human activities across continents.

It is not also helping that the production cuts previously agreed upon by the Organization of the Petroleum Exporting Countries and the Russia-led producers seem to have not been getting enforced at this time.