P8-P10/liter diesel price rollback seen

MANILA, Philippines — Motorists can expect another round of diesel price cuts next week, although renewed geopolitical tensions in the Middle East have limited the extent of the decline.

An industry source indicated a potential rollback of P8 to P10 per liter for diesel prices, while the cost of gasoline may either remain unchanged or rise by P1 per liter.

The estimates were based on the first four trading days on the Mean of Platts Singapore (MOPS), a key pricing benchmark for refined petroleum products across the Asia-Pacific market.

US President Donald Trump has issued a “shoot and kill” order to the US military against small Iranian boats that deploy mines in the Strait of Hormuz, a key waterway that typically carries about a fifth of global oil and gas supplies.

Trump has also maintained that the US has “total control” over the strait, following reports that Iranian forces seized two container ships.

The renewed escalation has driven MOPS prices and premiums higher over the past two days, trimming the potential rollback for diesel next week. It has also reversed the earlier outlook for gasoline, shifting it from a potential decline to a possible increase.

“Markets have remained highly event-driven, with shipping interruption and resulting disruption in supply flows triggering the volatility in prices,” the source said.

If the rollback pushes through next week, it would mark the third straight decline for diesel after five rounds of relentless hikes triggered by the war.

This week, diesel, gasoline and kerosene prices went down by at least P24.94, P3.41 and P2 per liter, respectively, as oil firms complied with the government-mandated price adjustments.

On top of the reductions, Shell has also rolled out a P5-per-liter discount on all fuels starting yesterday until April 30, subject to a minimum purchase of P1,500 for four-wheel vehicles and P200 for two-wheel vehicles.

Energy Secretary Sharon Garin said the government has enforced mandated price adjustments to prevent oil firms from imposing excessive increases.

The declaration of a national energy emergency triggered the Department of Energy’s authority to implement maximum price hikes and minimum rollbacks, Garin told reporters on Monday.

Not yet needed

Even as the energy emergency hits its one-month mark, there is no need yet for the government to step in and regulate the prices of basic goods, Trade Secretary Cristina Roque said yesterday.

Roque said automatic price controls on basic necessities and prime commodities (BNPCs) are not necessary at this stage, citing stable discussions with retailers and manufacturers.

“Actually, this is an energy crisis. It has nothing to do with the food. Of course, the President has that power. But for now, there’s no need for that,” she told “Money Talks” on One News yesterday.

Under Republic Act 7581, as amended by RA 10623, prices of basic necessities are automatically placed under price control – or frozen at prevailing levels – during times of emergency.

The law also authorizes the President, upon the recommendation of the implementing agency, to impose a price ceiling on any BNPC.

However, Roque said she still does not see sufficient basis for replicating what Garin did with the mandated fuel price adjustments.

“There’s no problem with the talks. They go very smoothly,” the trade chief said, noting that manufacturers understand the current situation.

The Department of Trade and Industry (DTI) has assured Filipino consumers that there will be no price increases for BNPCs until May 10. BNPCs include canned sardines, processed milk, bread, coffee, locally manufactured instant noodles, bottled water, laundry soap, candles, salt, canned meat, condiments and toilet soap with suggested retail prices.

According to Roque, there are currently no discussions between the DTI and manufacturers regarding a possible extension of the price freeze beyond May 10.

Halt on purchases

Government agencies were directed to put on hold the construction of new buildings and the purchase of vehicles, with funds to be channeled to mitigation programs that cushion the impact of a national energy emergency, the Department of Budget and Management said.
To generate funding sources, acting Budget Secretary Rolando Toledo ordered agencies to reduce maintenance and other operating expenses (MOOEs) by 20 percent and defer capital outlays.
He said that this may include deferring construction of new government buildings or facilities, as well as other capital outlays not yet ready for implementation.

“Purchase of any type of motor vehicles, except those deemed critical to health, uniformed services and disaster risk preparedness and response,” Toledo said.
Overall, the generated savings are projected at P236.6 billion.
For MOOE, Toledo said this includes traveling expenses, training and scholarship expenses, supplies and materials, utility expenses, representation expenses and other MOOE items that may be conserved through bureaucratic efficiency while ensuring continuous and uninterrupted delivery of public services.

“If there are some items from the foregoing enumeration that are deemed essential to the agency, the 20 percent cost reduction can be effected on the other non-essential or non-priority MOOE items,” he added.

Stations closed

Up to 287 gas stations remain closed due to lack of supply of fuel, the Philippine National Police (PNP) reported yesterday. The figure represents 1.97 percent of the 14,529 gas stations that have been monitored as of Thursday.

PNP spokesman Brig. Gen. Randulf Tuaño said lack of stocks of fuel is the reason why the gas stations stopped operations.

The PNP has filed 31 criminal cases for hoarding, profiteering, pilferage or paihi and other offenses related to petroleum products nationwide that resulted in the arrest of 77 people. — Emmanuel Tupas, Aubrey Rose Inosante