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Pump prices to rise over Aramco attack

September 21, 2019

PRICES of petroleum products are projected to surge by more than P2 per liter next week, according to industry sources.

A source on Friday said the cost of diesel might increase by P1.84 to P1.94 per liter and gasoline by P2.54 to P2.64 per liter, based on the average of the Mean of Platts Singapore (MOPS) trading from September 16 to 18.

A destroyed installation in Saudi Arabia’s Khurais oil processing plant is pictured on September 20, 2019. Saudi Arabia said on September 17 its oil output will return to normal by the end of September, seeking to soothe rattled energy markets after attacks on two instillations that slashed its production by half. / AFP / Fayez Nureldine

MOPS is the daily average of all trading transactions of diesel and gasoline, as assessed and summarized by Standard and Poor’s Platts.

Another source is expecting the price of diesel to go up by P1.60 to P1.80 per liter and gasoline by P2.10 to P2.30 per liter.

The fuel price projections came amid the Department of Energy’s (DoE) previous statement that it expects domestic fuel prices to normalize in the coming days after Saudi Arabia gave assurances that crude production would resume by the end of the month.

“Today, we just heard the good news that the Saudi Aramco was able to restore and production will be back to normal immediately, so that is a good development and I hope that the price[s] will correct and we will be monitoring how the global market behaves,” Energy Secretary Alfonso Cusi said in a media forum in Manila on Wednesday.

The Energy chief was optimistic that pump prices will rectify the surge in crude prices after drone strikes in Saudi Arabia’s key oil sites.

He assured the public that the Philippines had sufficient oil supply “to keep the economy running.”

The current inventory could last for 30 days, according to Cusi.

Over the weekend, drones struck the crude processing facility of state-run Saudi Aramco at Abqaiq and Khurais, the biggest in Saudi Arabia.

Production had been around 9.6 million barrels per day prior to the attack.

The incident wiped out 5 percent — or about 5.7 million barrels — of the world’s daily production.

After the attack, local industry players, including Petron Corp., Pilipinas Shell Petroleum Corp. and PTT Philippines Corp., said there would not be any supply disruption from their end.

On Tuesday, firms raised gasoline prices by P1.35 per liter, 85 centavos per liter for diesel and P1 per liter for kerosene.

Year-to-date adjustments stand at a net increase of P5.51 per liter for gasoline, P4.02 per liter for diesel and P2.01 per liter for kerosene, according to the latest data from the Energy department.

To ensure adequate oil supply in the Philippines as a result of the drone attack, Sen. Sherwin Gatchalian has called for a Senate inquiry into the DoE’s plans

Gatchalian, chairman of the Senate Committee on Energy, filed Senate Resolution 139 for the committee to conduct an inquiry, in aid of legislation, into the short-, medium- and long-term plans of the Energy department to achieve security, and mitigate the adverse repercussions of supply shocks on the country’s oil supply and prices.

His committee has scheduled a hearing for September 23.

According to Gatchalian, as of June of 2019, 99.9 percent of crude oil in the Philippines were imported, with 12 percent of the country’s supply coming from Saudi Arabia.

Sixty-eight percent of petroleum supply in the Philippines is consumed by the transportation sector, while power generation uses 5 percent, 11 percent for commercial use, 5 percent for manufacturing and the remaining 11 by other industries, including agriculture, mining and construction.

With a reports from JAVIER JOE ISMAEL

Credit belongs to : www.manilatimes.net

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