MANILA – Next week’s big-time fuel price rollback announced by the Department of Energy (DOE) may not happen, oil industry sources said Friday, as oil has started creeping up in the world market.
Instead, the prices per liter of diesel and gasoline may go up by as much as P0.20 and P0.35, respectively.
The oil industry sources’ take on the weekly direction of fuel prices contradict’s the statement of Energy undersecretary Felix William Fuentebella, who announced a “big-time” rollback due an oil supply glut in the world market.
Independent oil player Jetti Petroleum Inc.’s fuel price forecast for the week of Jan. 7, 2019 expects the prices per liter of diesel to go increase by P0.15 to P0.20 and gasoline by P0.30 to P0.35.
“The movement is basically due to MOPS and foreign exchange trading,” said a source from Jetti, who declined to be named.
The local oil industry uses Mean of Platts Singapore (MOPS), the daily average of all trading transactions between buyer and seller of petroleum products as assessed and summarized by Standard and Poor’s Platts, according to the DOE.
A source from the Energy department confirmed what the oil companies are saying.
“One day trading reversed the trend from rollback to increase,” said the DOE official who asked not to be identified, citing results of trading on Thursday, which affected next week’s direction of fuel prices.
Another source from an independent oil player told GMA News Online that pump prices of diesel and gasoline are expected to increase by P0.20 and P0.35 per liter, respectively.
However, the fuel price adjustments may still change depending on results of the MOPS and the peso-dollar trading on Friday, Jan. 4, 2018.
The DOE on Thursday said oil companies should first implement the price adjustments, as determined by market forces, before applying the second round of excise tax increase under the Tax Reform for Acceleration and Inclusion (TRAIN) law.
The TRAIN law imposed a P2.50 per liter excise tax on diesel, from zero, and hiked the levy on gasoline to P7.00 per liter on Jan. 1, 2018. The measure was signed into law by President Rodrigo Duterte in December 2017.
Under the tax reform law, fuel excise taxes will go up by P2.00 per liter starting Jan. 1, 2019. This means that the excise tax on diesel will go up to P4.50 per liter and on gasoline to P9.00.
The second round of excise tax increase on petroleum products officially took effect on Tuesday, Jan. 1, 2019, but the DOE expects it to be reflected on fuel prices by the middle of this month.
Oil companies must first consume their 2018 inventory before applying the second tranche of fuel excise taxes on sales. (GMA News)
