Next week’s spike may push diesel to P100/L
There will be no break from soaring fuel prices next week, with diesel tracking the P90 to P100 per liter mark, as the Middle East crisis continues to choke a vital route for a significant portion of the world’s oil supply.
An industry source told the Inquirer that the per-liter price of diesel may surge by P19.30 to P22.30 starting March 17. Gasoline prices may also rise by P14 to P17 a liter.
Fuel prices monitored by the Department of Energy (DOE) on Friday showed that the price of diesel at gas stations in North Luzon had already ballooned to more than P70 to P80 a liter. Premium diesel costs as much as P94.65 per liter.
The DOE has yet to release its price monitoring for the whole country.
A fuel company executive, who declined to be identified, told the Inquirer that next week’s price adjustments would result from the dwindling supply of diesel and gasoline.
According to him, the intensifying attacks by the United States and Israel against Iran have paralyzed maritime traffic through the Strait of Hormuz, a critical route for oil coming from the Persian Gulf where 20 percent of the world’s oil supply passes.
The company executive said the situation severely disrupted the supply chain, given the loss of crude feedstock from the Middle East. The situation also prompted refinery closures or run cuts in Asia, which depends on supply from the war-torn areas.
Energy Secretary Sharon Garin also said initial data from the trading session this week showed no easing in the surge of global oil prices.
‘Nobody knows’
“[Based] on our calculations, on average, it’s still not going down as we hoped,” she said in a television interview. “We don’t know what’s going to happen. Nobody knows. It’s just wait and see.”
Filipinos felt the impact of the Middle East war with the highest single-week hike in kerosene price of up to P38.50 per liter.
Diesel products are used largely for mass transportation, such as buses, trucks, jeepneys, and maritime vessels, such as fishing boats. Diesel also fuels machinery used in agricultural production.
Gasoline is mostly consumed by private and ride-hailing cars, taxis, motorcycles, tricycles and light utility vehicles.
Kerosene is mainly used for lighting and cooking, especially in remote areas.
Some oil companies heeded the government’s call to stagger the increases by implementing the hikes in two to seven tranches.
Prices are not regulated by the DOE under the oil deregulation law. Garin, however, has directed oil companies to ensure that gas stations adjust prices that reflect the real market conditions, warning that any premature, excessive or unreasonable increase in prices would not be tolerated.
Tax suspension bill
The government is trying to mitigate the impact of the fuel price surges, with President Marcos certifying the urgency of House Bill No. 8418, which would allow whoever is president to suspend or reduce the excise on petroleum products during national or global economic emergencies.
The adjustment of the excise on fuel will be based on recommendations by the Development Budget Coordination Committee and the DOE.
Executive Secretary Ralph Recto on Friday said Mr. Marcos wanted to sign the bill immediately.
Recto said he met on Thursday with executives of various oil companies in Malacañang to discuss ways to stabilize the prices of oil products and provide subsidies to transport groups.
“Thankfully the companies gave the assurance that whatever operational challenges in bringing the products here are manageable,” he said without providing details on where the petroleum products would originate.
Grab, Move It programs
The ride-hailing platform Grab and its motorcycle taxi arm, Move It, announced that they had rolled out programs to assist their drivers and riders in coping with the fuel price hikes.
Grab said in a statement on Friday that these programs would also help maintain the availability of their services across its transport platforms.
The company said it would provide a P3-per-liter fuel rebate to nearly 20,000 drivers and riders nationwide through a partnership with Shell from March 16 to March 31.
Grab also said its partnerships with Seaoil, Caltex and Blu Energy would allow drivers and riders operating both four-wheel and two-wheel vehicles to obtain fuel savings of up to P4 per liter.
Spot bonus
Its GrabCar partners will receive commission rebates and real-time per-trip cashback under a revised incentive structure designed to stabilize take-home earnings during busier periods “when fuel costs are felt most acutely.”
GrabFood delivery riders using motorcycles will receive a P3-spot bonus for every completed delivery nationwide. The bonus was calibrated against prevailing fuel price movements and average fuel consumption.
For motorcycle taxi operations, Move It will implement fuel allowance top-ups for “consistently active” rider-partners and additional incentives during periods of peak demand.
“Fair earnings are what keep drivers on the road,” Grab Philippines managing director Ronald Roda said.
The Grab programs are in addition to the P5,000 fuel subsidy for transport workers to be distributed by the Department of Social Welfare and Development in coordination with the Department of Transportation.
“Grab and Move It affirmed that today’s measures are a first response, not a final one,” the company said.
Fuel subsidies
Government fuel subsidies for public utility vehicles (PUVs) may be distributed through digital payment platforms, according to Vigor Mendoza, chair of the Land Transportation Franchising and Regulatory Board (LTFRB).
The agency tapped electronic money issuers (EMIs) to be the payment distributors for the subsidy, but their capabilities need prior validation “to ensure an efficient, secure and transparent distribution of fuel subsidy assistance to program beneficiaries.”
This digital fund distribution method has been proven effective and efficient in the past, he said.
The LTFRB has written EMIs accredited by the Bangko Sentral ng Pilipinas to participate in the transactions and submit proofs of their legitimacy and capability to serve as payment channel providers. —WITH A REPORT FROM DIANNE SAMPANG
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