Oil prices jump for 8th consecutive week, Brent crude breaches $83

Ralf Rivas
The latest round of price increases brings common gasoline prices to around P59 to P62 per liter, and diesel prices to around P47.95 to P50.75 per liter

SOARING FUEL PRICES. Oil prices jump for the 8th consecutive week in the first week of October 2018. Photo by Jire Carreon/Rappler

MANILA, Philippines – Oil prices rose for the 8th consecutive week on Tuesday, October 2, following the continued increase in global prices.

Gasoline prices went up by P1 per liter, diesel by P1.35 per liter, and kerosene by P1.10 per liter.

Major players Caltex Philippines, Eastern Petroleum, Petro Gazz, Pilipinas ShellTotal Philippines, Phoenix Petroleum, Flying V, Seaoil Philippines, and PTT Philippines announced the hike. Other players are expected to follow.

The latest price increase pushes common gasoline prices up to around P59 to P62 per liter, and diesel to hover around P47.95 to P50.75 per liter.

Liquefied petroleum gas (LPG) prices also rose to P2.35 per kilogram (kg), bringing prices of an 11kg tank to around P645 to P865. 

The hikes were implemented as Brent crude oil breached $83 per barrel, the highest level since November 2014.

The Department of Energy (DOE) attributed the global price increases to the deepening trade tension between the United States and China, potential supply tightening to Iran sanctions, and a decline in Iranian crude oil export loadings.

The oil increases also comes as the Philippine peso value against the US dollar remained at P54-levels.

No TRAIN suspension yet

According to the implementing rules and regulations (IRR) of the tax reform for acceleration and inclusion (TRAIN) law, the measure will be suspended when crude prices hit $80 per barrel.

However, the IRR also said that the prices should hover at such levels for at least 3 months before the law is suspended. (READ: House opposition wants to suspend excise tax increases on fuel, oil)

The TRAIN law states that another round of excise taxes will be slapped on fuel on January 1, 2019. Excise tax on fuel will be P2 per liter or more or a total of P4.50.

Excise taxes will only be suspended if crude prices average at least $80 per barrel from October to December.

The government is somewhat able to shield jeepney drivers from the price shocks through subsidies. Fuel vouchers amounting to P853 per month were distributed to around 180,000 public utility jeepney drivers  with franchises. – Rappler.com

Ralf Rivas

A sociologist by heart, a journalist by profession. Ralf is Rappler's business reporter, covering macroeconomy, government finance, companies, and agriculture.