Oil firms hike prices as tension in Iraq worsens

MANILA, Philippines – Oil companies jacked up prices of petroleum products by over P1 ($0.0228) per liter—the highest adjustment so far this year.

The benchmark Dubai crude rose by nearly $3 per barrel to nearly $110 per barrel mid-June against the previous week’s average of $106.60 barrel brought about by the tension in Iraq.

At 6 am Tuesday, June 24, oil firms raised gasoline prices by P1.30 ($0.0296) per liter, diesel by P1.20 ($0.0274), and kerosene by P1.45 ($0.0331).

The move brought prices of gasoline and diesel to P57.70 ($1.3158) per liter and P45.75 ($1.0433) per liter, respectively, on average.

“This reflects movements in the international oil market,” Petron Corporation said.

Iraq produces 3.3 million barrels of crude oil daily and is the second largest producer in the 12-member Organization of Petroleum Exporting Countries. It is also the third largest exporter of crude after Russia and Saudi Arabia.

Iraqi production represents nearly 4 of the world’s total daily consumption of 93 million barrels per day.

The Department of Energy said it did persuade oil firms to implement the price hike on staggered basis saying this would only burden consumers more.

Consumers are reeling from rising prices of basic commodities, and the newly implemented jeepney fare hike.

Tension in Iraq and oil price hike

The tension in Iraq continues to worsen. Large areas of the oil-producing country are now under control by the militant Sunni group Islamic State of Iraq and Syria (ISIS), including the 300,000 barrel-per-day Baiji refinery. It is Iraq’s largest, located 250 km north of the Iraqi capital Baghdad.

The refinery supplies nearly a third of Iraqi domestic requirements. Lead elements of ISIS are only several kilometers from the capital itself.

The spreading conflict has stoked fears of oil supply disruptions as several oil companies have begun evacuating personnel from major oil fields. – Rappler.com