Fuel prices spike up today

MANILA: Fuel prices shoot up for two consecutive weeks as oil companies are set to enforce adjustments beginning today, May 19. This is following the announcement of the national government regarding the implementation of the modified enhanced community quarantine (MECQ) in Metro Manila and other high-risk areas, and the general community quarantine (GCQ) in most provinces in the country.

More private vehicles and tricycles are now allowed to travel since most public and private establishments have opened since May 16. As such, fuel companies are set to increase kerosene costs by Php2.35 per liter, gasoline costs by Php1.25 per liter, and diesel costs by Php0.55 per liter.

For May, the cumulative increase in kerosene is at Php3.60 per liter, Php4.00 per liter for gasoline, and Php2.45 per liter for diesel.

The fuel price hike mirrors the movement of oil prices in the global market. Oil prices worldwide have begun to increase this May since oil exporters and producers have agreed to lessen their production to 10 million barrels a day until June.

On May 18, global oil prices spiked up by more than US$1.00 per barrel to their highest in over a month. Aside from the output cuts, signs of a steady recovery in terms of fuel demand have been seen. This is because more countries like the Philippines have eased the restrictions enforced to contain the spread of the COVID-19 pandemic.

To date, West Texas Intermediate (WTI) crude had a trade at USD$30.77 a barrel, increasing from USD$24.74 per barrel last week.

An increase in Brent crude price up to USD$33.78 per barrel from the price last week of USD$30.87 per barrel was also observed.

The production cuts of the Organization of the Petroleum Exporting Countries (OPEC) also support the oil price hike.

Saudi Arabia, as the leading oil exporter in the world, confirmed two weeks ago that it would have a production cut of an additional 1 million barrels a day in June. Meanwhile, OPEC+ (OPEC and its allies, including Russia) prefers to keep current oil cuts beyond June until their next meeting.

Photo from Shell

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