Oil price rollback seen; Meralco rates may go up

Richmond Mercurio – The Philippine Star

November 4, 2023 | 12:00am

MANILA, Philippines — Pump prices could see a rollback next week, potentially ending three straight weeks of price hikes for gasoline.

“Based on the four-day trading, we will be expecting another round of rollback on prices of petroleum products,” Department of Energy (DOE) Oil Industry Management Bureau assistant director Rodela Romero said.

Romero said the estimated amount of adjustments could be a possible decrease of P0.40 to P0.60 per liter for gasoline, P1 to P1.30 per liter for diesel and P0.80 to P1.05 per liter for kerosene.

An oil industry source, on the other hand, estimated potential price reductions ranging from P1.20 to P1.30 per liter for diesel and a possible decline of between P0.60 and P0.70 per liter for gasoline.

Cleanfuel, for its part, said running trend points to rollbacks of P1 per liter for gasoline and P1.30 per liter for diesel for next week.

“This rollback adjustment is attributed to the contained situation of the Israel-Hamas war, additional crude production outputs from OPEC and US and slowing fuel demand growth due to weakening global economic growth,” Romero said.

The DOE official, however, said the price estimates may still change as a result of Friday’s trading.

Should the forecasted downward adjustments push through, it will end three successive weeks of price increases for gasoline and extend the price reductions for diesel and kerosene to a second consecutive week.

Last Tuesday, oil firms cut prices of diesel by P1.25 per liter and kerosene by P1.20 per liter, while gasoline prices were raised by P0.45 per liter.

The price adjustments resulted in a year-to-date net increase of P14.20 per liter for gasoline, P10.45 per liter for diesel and P5.04 per liter for kerosene, data from the DOE showed.

Meralco rates

Rates of Manila Electric Co. (Meralco) could go up anew this month due to upward pressure on the generation charge, which is the largest component of the electric bill.

“While we have yet to receive the final billings from our suppliers, initial indication shows that there is upward pressure on the generation charge this month,” Meralco vice president and head of corporate communications Joe Zaldarriaga said.

“This is expected to be driven by higher wholesale electricity spot market (WESM) prices in October due to the previously reported increase in plant outages. The hike in Malampaya natural gas prices due to the quarterly repricing is expected to have an impact as well on the billings of customers,” he said.

Zaldarriaga said Meralco is hoping that these can somehow be mitigated by other supply factors.

WESM charges is a result of more plants going on scheduled and unscheduled outgas during the October supply month, Meralco vice president and head of utility economics department Lawrence Fernandez explained.

“However, we are still hoping that there was much less use of alternative fuel by First Gas last month and that this could offset the higher WESM charges and Malampaya repricing,” Fernandez said.

The generation charge, which is a pass-through charge which is paid to the power suppliers, accounts for more than half of the electric rate.

Meralco’s generation costs are usually influenced by the exchange rate, the supply-demand situation and its effect on wholesale electricity spot market prices and international fuel prices.

“Rest assured that Meralco is relentlessly working to deliver stable and reliable electricity service at the least possible cost,” Zaldarriaga said.

Meralco rates went up for the second straight month in October as a result of higher generation and transmission charges.

Meralco’s overall electricity rate for a typical household last month was higher by P0.4201 per kilowatt-hour (kWh) to P11.8198 per kWh from P11.3997 per kWh in September.

Meralco is the largest electric power distribution company in the country, providing electric service within its franchise area coverage which includes Metro Manila, all of the provinces of Rizal, Cavite and Bulacan and parts of the provinces of Pampanga, Batangas, Laguna and Quezon.

The company as of end-June has a total customer count of 7.716 million.


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