Pump prices in the country went up for the fourth consecutive week in what market analysts and energy officials attribute to continuing geopolitical tensions in the Middle East and prospects of higher oil demand.
Effective 6 a.m. Tuesday, the price of gasoline increased by PHP1.60 per liter, diesel by PHP0.65 per liter, and kerosene by PHP0.60 per liter.
Cumulatively, gasoline prices have increased by PHP3.20 per liter, diesel by PHP4.15 per liter, and kerosene by PHP3.30 per liter since last month.
“Geopolitical tensions in the Middle East, unexpectedly large withdrawals from U.S. crude inventories, and optimistic forecasts for summer fuel demand have all contributed to pushing prices in oil products higher,” said Rodela Romero, director of the Department of Energy’s (DOE) Oil Industry Management Bureau.
Meanwhile, DOE Undersecretary Rowena Guevara reiterated the higher biofuels blend will allow motorists to gain more mileage for every liter of diesel, thus, saving money.
Guevara said the DOE has issued the Department Circular No. DC2024-05- 0014 or the “Guidelines on Biofuel Blend Implementation,” requiring the downstream oil industry participants to gradually increase the amount of coco methyl ester (CME) mixed in their diesel products.
The circular directs local oil firms to implement a three percent CME blend in diesel fuel beginning Oct. 1, 2024, four percent by Oct. 1, 2025, and five percent by Oct. 1, 2026.
Guevara said a 30,000-kilometer test with a five percent CME blend showed a 10 percent mileage increase, translating to an estimated net savings of PHP4.17 per liter at current prices.
She said the downstream oil industry participants may also raise the ethanol blend in all gasoline fuel products to 20 percent from the current 10 percent, potentially reducing pump prices by PHP3.21 per liter.
Meanwhile, power retailer Manila Electric Co. (Meralco) announced a possible increase in electricity prices in July due to higher generation charges with the collection of the staggered charges from the spot market.
Meralco vice president and head of utility economics Lawrence Fernandez said the deferred charges amount to PHP0.77 per kilowatt-hour while the red alerts early last month are expected to add pressure on Wholesale Electricity Spot Market (WESM) charges.
However, he said, cooler temperatures may mitigate its impact.
“We may expect strong pressures for the generation charge to increase this July. To recall, the generation charge saw a reduction in June after ERC (Energy Regulatory Commission) directed the staggered collection of WESM charges over four months,” he noted.
The ERC earlier ordered all distribution utilities and electric cooperatives to stagger the collection of charges covering spot market purchases in the May supply month into four equal monthly installments starting this billing month until September 2024.
Aside from the ERC’s order, Meralco asked its power suppliers, specifically, Quezon Power (Philippines) Ltd., San Buenaventura Power Ltd. Co., and South Premiere Power Corp. to likewise defer PHP500 million in generation costs to cushion the impact of higher pass-through charges to customers in June.
These charges will be collected over the next three billing periods beginning in July, Fernandez further explained.
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