Over P10/Liter Fuel Price Hike Likely – DOE

Motorists face a looming increase at the pump next week, with gasoline and diesel prices in Metro Manila expected to surge beyond P100 per liter.

Department of Energy (DOE) director Rino Abad told reporters on Thursday, July 16, that fuel prices could see an “extra-large” adjustment on July 21, with increases potentially hitting over P10 per liter.

Abad said the DOE is set to hold a meeting today, July 17, to discuss the reinstatement of stricter fuel pricing measures amid renewed geopolitical tensions in the Middle East. It remains unclear whether oil companies will be invited to participate in the meeting.

After the first three trading days, Jetti Petroleum president Leo Bellas indicated potential price hikes of P9 to P10 per liter for diesel and P3.50 to P4.50 per liter for gasoline.

The projections may still rise or fall, with two trading days remaining.

“World oil prices have increased significantly this week due to the renewed hostilities in the Middle East, rekindling supply concerns as vessel traffic in the Strait of Hormuz declined significantly,” Bellas said.

This week, diesel prices went up by P2.62 to P4.62 per liter, while the cost of gasoline climbed by P1 per liter.

Currently, gasoline is sold for up to P96.10 per liter in Metro Manila, while premium diesel prices reach as high as P90.77 per liter.

“The renewed conflict in the Middle East has increased concerns over potential supply disruptions, which is pushing global oil prices higher,” Top Line Business Development Corp. senior vice president and COO Brigitte Carmel Lim said.

If the trend persists, Lim said domestic pump prices would likely continue to rise in the coming weeks.

“For now, we are closely monitoring the market and remain hopeful that geopolitical risks ease to help stabilize oil prices,” she added.

Land Transportation Franchising and Regulatory Board (LTFRB) chairman Vigor Mendoza II favored recommending fare hikes, saying an increase would have a “minimal impact” to the public given the recent minimum wage hike.

He noted that regulators could approve fare hike petitions if fuel prices breach P70 per liter.

“So we’re reviewing the impact of a fare increase to that decision or a subsidy can be given,” Mendoza told dzMM. “Our recommendation really would be to bite the bullet and increase fares.”

A P10 fuel subsidy for jeepney and utility vehicle drivers is currently being implemented with the government spending P160 million a month.

Mendoza said if the fuel subsidy is expanded for all public utility vehicles, the government would have to shell out around P2.4 billion monthly.

“The subsidy that we will give is huge – P2.4 billion a month. We could do a lot more tricks with that money compared to increasing fares,” he added.

Mendoza said Transportation Secretary Giovanni Lopez ordered the LTFRB to study the kind of fuel subsidy that can be implemented. The agency is set to submit its recommendation for a possible fuel subsidy or fare increase today.

No electricity disconnections

Meanwhile, the Energy Regulatory Commission (ERC) has suspended electricity service disconnections for unpaid power bills for three more months.

In an advisory on Thursday, the ERC said the extension covers unpaid electricity bills for the August to October billing periods for both residential and non-residential consumers nationwide. — With Josiah Antonio