OIL companies in the country implemented another round of oil price hikes Tuesday morning, Oct. 19, 2021, this time raising diesel prices by P1.50 per liter and gasoline prices by P1.80 per liter.
They also increased the price of kerosene by P1.30 per liter.
Pilipinas Shell, PTT Philippines, Total, Seaoil, Petron and other oil firms announced their price hikes Monday on social media.
This is the eighth straight week that oil firms have raised prices.
The Department of Energy’s (DOE) weekly monitoring shows that from early this year, the price increases have totaled P16.50 per liter for diesel, P17.85 for gasoline and P14.19 per liter for kerosene.
With the rise in oil prices, the Pinagkaisang Samahan ng mga Tsuper at Operators Nationwide (Piston) Cebu called on the government to abolish or lower the tax levied on each liter of oil to keep price increases minimal.
Greg Perez, chairman of Piston Cebu, said oil price hikes greatly affect the livelihood of drivers. Higher gas prices would mean less income to bring home to their families.
He said they were already affected by the Covid-19 pandemic as passengers may occupy only 50 percent of the capacity of public transportation so social distancing can be observed.
The new fuel price hikes would just make life more difficult for them.
Perez said drivers are not the only ones affected but also the riding public, who will pay higher fares.
Under the Tax Reform for Acceleration and Inclusion law passed in 2017, higher excise taxes were imposed on petroleum products.
In 2020, the excise tax per liter of volume capacity on unleaded premium gasoline was P10 (up from P8 in 2018); kerosene, P5 (from P3 in 2018); and diesel fuel, P6 (from P2.50 in 2018).
The excise tax for liquefied petroleum gas per kilogram was P3 (from P1 in 2018), according to the Bureau of Internal Revenue.
Short on supply
In a press release Tuesday, the Department of Energy (DOE) put the prolonged oil price spike down to world oil production being currently lower than demand.
Daily oil demand has reached 103.22 million barrels per day, but supply has reached only 100.32 million barrels per day or a shortfall of 2.9 million barrels per day, it said.
The DOE said demand had surged amid the gradual return of economic activities after the control of the spread of Covid-19, with Europe implementing a “no-lockdown policy” and China boosting its economy, as well as the stocking up on petroleum products by countries as winter approaches.
Supply, on the other hand, was reduced due to the shift in energy extraction to low-carbon emitting sources that has caused the halt and “withdrawal of investments in the development and expansion of the fossil fuel industry,” the DOE said.
Production is down also because economic sanctions on Iran and Venezuela have stopped oil drilling activities and the purchase of oil from there.
However, according to the DOE, the Organization of Petroleum Exporting Countries (Opec) has promised to increase its production by 400,000 barrels per day.
Discounts
The DOE is meeting with oil industry stakeholders so the oil price hikes don’t adversely affect the public transport sector.
Some oil firms, such as Jetti, Seaoil, Shell, Phoenix and Unioil, have also agreed to offer discounts in the public transport sector, in addition to their offering discounts for Covid-19 vaccination and loyalty incentives, the DOE said.
Aside from this, the DOE urged the Lower House to amend the Oil Deregulation Law to allow the government to intervene and “address sudden, prolonged oil price spikes, including the unbundling of the cost of petroleum retail products to determine their true and passed-on costs.” (REV, KFD, CTL)