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Another round of pump price hikes possible amid peso weakness, DOE says

Pump prices of petroleum products in the country could continue to increase in the coming week due to a mix of factors including the depreciation of the Philippine peso, the Department of Energy (DOE) said Tuesday.

According to Energy Undersecretary Gerardo Erguiza Jr., higher costs and the performance of the peso against the dollar could drive domestic prices even higher.

“Nung trend kahapon lumabas ‘yung global market price sa trading, may bahagyang pagtaas ho, so kung ganito ‘yung tutuluyan nito, magsasama ho, magcocompound ‘yung pagtaas ng presyo at ‘yung pagtaas ng dolyar,” he said during the Laging Handa virtual briefing.

“We just hope ‘yung dolyar forex naman po ang bumaba ngayon,” he continued.

(The trend of the global market price on trading yesterday showed a slight increase so if this continues, this will be compounded with the appreciation of the dollar. We just hope that the dollar foreign exchange goes down.)

The Philippine peso closed Monday at P54.78:$1, indicating a rebound from last Friday’s finish of P54.985:$1 or the weakest since October 27, 2005.

“Ang nakita namin bakit tumaas, it’s because of one variable — ‘yung forex. Binibili natin itong mga krudo natin at oil products based on the dollar, kaya nagtaas po ang forex, kaya tumaas din ang presyo natin,” Erguiza explained.

(What we saw is that one variable caused the increase — the foreign exchange. We purchase crude and oil products based on the dollar, so when the exchange increased, our prices also increased.)

Meanwhile, oil firms on Tuesday implemented another round of price hikes to mark the fourth straight week of increases for gasoline, and fifth for both diesel and kerosene.

“Based on these two variables, kung talagang tumaas ito pareho eh medyo tataas talaga ‘yung presyo,” Erguiza said.

(Based on these two variables, if they both increase then local prices will really go higher.)

Data from the Department of Energy (DOE) show that year-to-date adjustments stand at a net increase of P29.50 per liter for gasoline, P44.25 per liter for diesel, and P39.65 per liter for kerosene as of June 21, 2022.

Monitoring of the DOE showed that prices in Metro Manila ranged from P75.95 per liter (Pasig City) to P98.90 per liter (Muntinlupa City) for gasoline; from P81.55 per liter (Quezon City) to P98.00 per liter (Pasay City); and from P89.64 per liter (Manila) to P99.04 per liter (Taguig City) for kerosene as of June 23, 2022.

Erguiza Jr. last week said pump prices could hit P100 per liter should the weekly increases continue, due to a mix of factors including the global demand and the geopolitical tensions between Russia and Ukraine.

Moving forward, Erguiza renewed calls for the amendment of the Oil Deregulation Law which would entail an automatic pricing mechanism, the unbundling of oil prices, and institutionalizing a minimum inventory requirement.

Malacañang has also called for such amendments, but Erguiza earlier said it would be difficult to pass these before the end of the term of President Rodrigo Duterte which ends this week.—AOL, GMA News