Oil firms hike kerosene, gasoline prices

MANILA, Philippines – Oil companies on Tuesday, December 30, increased kerosene and gasoline prices following a series of rollbacks.

Petron Corporation, Pilipinas Shell, and Seaoil raised the price of kerosene by P0.10 ($0.0022*) per liter and gasoline by P0.30 ($0.0067) per liter. Diesel prices remain unchanged.

Other oil firms are also expected to raise prices of these select petroleum products.

To date, oil prices dropped 46%this year – the biggest since 2008, as the Organization of the Petroleum Exporting Countries (OPEC) refused to cut supply even as US production climbed to the highest level in 3 decades.

Factors blamed for the drop include oversupply in the crude market, a slump in economies, particularly in China and in Europe, and the growing utilization of US shale oil.

In the Philippines, oil prices have gone down at least 26 times since the start of 2014 for gasoline, equivalent to nearly P18.30 ($0.4089) per liter, while diesel prices dropped 31 times or about P18.85 per liter, data from the Department of Energy (DOE) showed.

 Crude prices dipped to as low as $65 per barrel, DOE added.

In its December 10 report, the Institute of International Finance (IFC) said that the overall net impact of falling oil prices on the global outlook is clearly positive. (READ: What explains the plummeting gas prices?)

“In our assessment the price drop is largely a consequence of surging oil supply, together with a strategic decision by OPEC not to cut back its own output. The result is a shift in purchasing power from producers to consumers that should provide a significant boost to global demand at a time of excess capacity,” IFC said.

The price drop also provides more space for supportive monetary policies in a number of economies as well as cost of energy subsidies.

“Assuming that the price decline is largely sustained, we estimate the net effect will be to raise global GDP by roughly 1/2 percent over a two year period,” IFC added. – Rappler.com