For the past few months of 2022, the price of gasoline in the Philippines has been a rollercoaster ride, with an abrupt up and down trend. Every week, people wanted to know what the price would be because it would determine how they would budget their transportation expenses, especially since inflation has been affecting us and not only are we experiencing oil price hikes, but so are a great extent of other products and services. Moreover, the most recent price changes resulted in a net increase of P19.30 per liter for gasoline and P34.80 per liter for diesel for the year to date.
For the month of July, the price of gas exhibited a more relaxed downtrend as various policies and global trading caused the price to relax in order to combat a possible recession that could occur if not addressed properly. Concerns about the economy and the strength of the US dollar have weighed on oil prices, causing both benchmarks to fall. Hence, in addressing the possible problem to come, international oil prices fell below $100 a barrel on Thursday, reaching levels last seen before Russia invaded Ukraine.
Moreover, The Department of Energy (DOE) previously stated that oil prices could reach P100 per liter if the European Union’s oil ban caused by Russia’s invasion of Ukraine, increased demand in the United States and China, and the premium in Saudi Arabia crude continue.
After nearly a month or four consecutive weeks of constant oil price hikes, it was announced that a halt is to be expected for this burdensome increase for the month of July. For motorists here in the Philippines any reduction, large or small, is welcomed. Many people believe that this small respite from fuel price increases will be a fleeting “victory,” and that next week’s hikes will be greater than the price reductions.
Gas Price Update for July
The downtrend of gas prices in the Philippines began last July 5 to 11. Where oil prices was reduced by oil companies as follows: Diesel prices have been reduced by P3 per liter, Gasoline remained unchanged, and kerosene prices have been reduced by P3.40. While also in helping ease the burden of price increases, local government units across the country have distributed fuel subsidies to public utility vehicles.
After a week of easement from the tormenting oil price hikes, another rollback was announced for July 12 to 18. According to Director of the Department of Energy-Oil Industry Management Bureau Rino Abad that the price decreases was due to the Shanghai lockdown, interest rate hikes by various countries, and the threat of recession, which could destroy demand if not addressed. In line with this, various oil companies from the Philippines announced that gasoline is to be reduced by P5.70 per liter, diesel by P6.10 per liter, and kerosene by P6.30. Fortunately, these are the most significant rollbacks we’ve seen for a long time.
Following weeks of consecutive oil price increases, this is the third week in a row of fuel price cuts. For July 19-25 separate advisories issued from various oil companies prior to the week stated that gasoline prices would fall by P5 per liter, diesel prices would fall by P2 per liter, and kerosene prices would fall by P0.70 per liter. If the current trend continues, we hope to recover and return to more affordable prices.
As of this writing, the Year-to-date adjustments resulted in a net increase of P24.30 per liter for gasoline, P36.80 per liter for diesel, and P30.05 per liter for kerosene. To add, the most recent price update from the DOE website for the following petroleum products is (These are retail prices that include all taxes and other fees):
Diesel: Php 81.60
Gasoline: Php 80.60
LPG: Php 41.25
Kerosene: Php 85.02
As of this writing, another round of rollback was announced since last week, the global market saw an initial softening of prices due to indications from Saudi Arabia, the world’s largest oil producer, that it will inject an additional 100 million barrels of oil into export markets. The projected oil price movement by next week ranges from P1.60 to P1.80 for diesel, P0.50 or no change for gasoline, and up to P1.00 per liter for kerosene.
In addition to this, official Facebook page of Unioil Petroleum Philippines announced fuel forecast to a rollback for July 26 until August 1 where in Diesel should go down by P1.80 to P2.00 Pesos per liter at the same time Gasoline should go down by P0.30 to P0.50 Pesos per liter.
Gas Price Forecasts for the Philippines in the Coming Weeks
Oil Industry Management Bureau Director, Rino Abad confirmed in a report that there could be a P1.60 to P1.80 per liter rollback for diesel, and an P0.05 adjustment for gasoline for next week. He stated that the adjustment for kerosene could be more or less P1. Abad also stated that the European Central Bank (ECB) announced of an interest rate hike caused fuel trading prices to fall. Furthermore, an oil industry source stated that the projected pump price adjustments are still subject to change depending on the next trading days. In addition, weakened economic activity, as well as ongoing coronavirus cases in China, may cause a drop in fuel demand, resulting in lower prices later in the year.
Government Plans to Combat Oil Price Hikes
Rep. Michael Romero of the Patriotic Coalition of Marginalized Nationals (1-Pacman) party-list suggested reviving the Oil Price Stabilization Fund (OPSF), which was established by late President Ferdinand Marcos during the 1970s oil crisis. Apart from the Ukraine conflict, Romero forecasted that oil prices would remain “volatile and elevated” due to global recovery efforts from the COVID-19 pandemic, with economies requiring more oil to power their factories. Furthermore, Romero expressed hope that President Ferdinand Marcos Jr. would consider creating a buffer fund or reviving the OPSF, which his late father and namesake established in 1971 and renamed in October 1984 by Presidential Decree No. 1956.
Meanwhile, after a new round of oil price increases, progressive group Bagong Alyansang Makabayan asked presidential candidates to unite in support of a call to suspend excise tax on April 25. On the other hand, President Bongbong Marcos rejects the suspension of the fuel excise tax. The administration maintained that instead of a tax holiday, hard-hit families would receive social assistance from the government. However, Marcos stressed that if a study shows that eliminating excise taxes on fuel products would be beneficial, he may push for it something that his economic team will tackle as it is not simple to implement since the cost-benefit analysis shall be taken seriously.
On the other hand, while gas prices have become prohibitively expensive for many Filipino car owners, the Department of Transportation (DOTr) has announced that free rides on the EDSA carousel will be extended until the end of 2022. Furthermore, it is announced that students will receive free rides on the following public transportation systems: PNR, MRT-3, and LRT-2.