Sunday, June 15, 2008 Oil prices rise for 15th time
FOR the 15th time since January, oil companies raised the prices of gasoline, diesel and kerosene yesterday, this time by an average of P1.50 per liter.
Pilipinas Shell led the charge, adjusting prices at 12:01 a.m., followed within hours by Petron, Total, Chevron and Unioil Philippines.
Shell, Petron and Total also raised liquefied petroleum gas (LPG) prices by P1 per kilogram, ABS-CBN reported.
This month alone, oil companies have raised gasoline and diesel prices thrice, “reflective of the unrelenting price increases in the world market,” said the Department of Energy (DOE) on its website.
As of June 10, the average price of Asian Dubai crude shot up by US$3 per barrel compared to the average price in May. Gasoline now costs $7 more per barrel and diesel, about $4 more per barrel.
A surge in demand in China has helped yank diesel prices up, as power plants in some areas there “are running desperately short of coal and certain earthquake-hit regions are relying on diesel generators for electricity,” the DOE’s regular Oil Monitor added.
With the latest increase, a liter of unleaded gasoline now costs P56.46 on average. It cost only P44.45 at the end of January—an increase of P12 in just half a year.
An 11-kilogram tank of LPG cost P594 as of end-January. Now, the same tank retails from P604 to P650.
The Bagong Alyansang Makabayan (Bayan) has warned that if unchecked, rising prices could create “a perfect storm” of poverty-triggered unrest.
“Recent estimates claim that a 10 percent increase in oil prices translates into an additional 160,000 poor people. Since the start of the year, the average pump prices in the country have jumped by more than 20 percent, which means that the number of poor Filipinos could have already increased by around 320,000 in less than six months,” ABS-CBN quoted Bayan secretary general Renato Reyes Jr. as saying.
Conversion
President Arroyo will award certificates tomorrow to help five transport groups in Metro Manila convert from diesel to LPG-fed engines, as one way to help drivers cope with the price increases, the Office of the Press Secretary said.
The initial recipients are the Pasadang Masda, Makati Jeepney Operators and Drivers Association, Caloocan Jeepney Operators and Drivers Association, Pambansang Kalipunan ng mga Kooperatibang Pangsasakyan and Mega Manila Operators and Drivers Alliance.
Government will initially pay the P70,600 for each engine’s conversion, and will give operators and drivers two years to pay back, at no interest. It expects to convert 10,000 jeepneys initially.
Abroad, oil prices pulled back Friday after the Organization of Petroleum Exporting Countries (Opec) questioned whether crude can remain so high and the dollar gained against the euro.
Consumers in the Philippines aren’t the only ones filling the pain at the pumps.
Cartel
In the United States, filling station operators pushed average gas prices deeper into record territory. Prices at the pump are up nearly seven cents since crossing the $4 per gallon (3.79 liters) threshold nationwide last weekend.
In its monthly market report, the Opec said oil’s recent volatility “reconfirms the view that current price levels do not reflect supply and demand realities.”
The cartel also lowered its 2008 global demand forecast, saying it now expects demand to increase by 1.28 percent to an average of 86.9 million barrels per day, down from a previous forecast of 1.35 percent.
Phil Flynn, an analyst at Alaron Trading Corp. in Chicago, said the revised forecasts suggest global demand for oil is slowing. That trend could accelerate, he added, if prices don’t come down soon.
“It’s a sign that maybe the bull run could come to an end. You don’t want to say that for sure, but you’re starting to see some shifts,” Flynn said.
Oil prices were also pressured by speculation that Saudi Arabia may boost production following a report in the Middle East Economic Survey, an industry publication.
Threat
Many developing countries, which typically have far lower household incomes, hold food and fuel prices lower through subsidies. But higher commodity costs are forcing some governments to increase those discounted prices.
In Malaysia, more than 1,000 opposition supporters marched through Kuala Lumpur on Friday to protest the government’s recent decision to hike retail prices 41 percent to $3.30 a gallon (about P38.62 a liter). Demonstrations have also broken out in India.
United Nations Secretary-General Ban Ki-moon said soaring food and fuel costs could pose a threat to global stability.
“Unless we properly manage this issue, this could trigger a cascade of other challenges and crises affecting not just social and economic issues, but also political and security issues,” Ban said, following talks in London with British Prime Minister Gordon Brown. (With AP)
