February 21, 2018, 1:22 pm
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Oil firms cut prices

After five consecutive weeks of oil price hikes, local oil firms are rolling back the retail cost of petroleum products as global prices decreased last week due to fears that the United States’ production and inventories growth will affect the Organization of the Petroleum Exporting Countries’ (OPEC) production cut.

Seaoil and Shell reduced the prices of gasoline by P0.50 per liter, diesel by P0.15 per liter and kerosene by P0.35 per liter.

Meanwhile, Phoenix, PTT and Eastern Petroleum adjusted prices downward by P0.50 per liter for gasoline and P0.15 per liter for diesel.

The Department of Energy’s (DOE) latest oil monitor showed the current average price of diesel is now P36.05 per liter and gasoline is P49.05 per liter.

According to a Reuters report, Brent crude futures settled at 51 cents or 0.8 percent lower at $61.36 per barrel as of last Thursday, while US light crude fell by 19 cents or 0.3 percent to $55.14 a barrel.

“Certainly U.S. oil production is not slowing down. If crude imports remain elevated and exports don’t rebound, then the bullish underlying tone begins to fade,” said Kyle Cooper, analyst at IAF Advisors in Houston.

The report also mentioned that the US Energy Information Administration showed last week that domestic crude inventories rose for a second week, building 1.9 million barrels alongside gasoline stockpile.

The International Energy Agency also projected that the US is expected to account for more than 80 percent of the growth in world crude supply in the next decade.

OPEC and non-OPEC exporters including Russia agreed a year ago to cut crude output by 1.8 million barrels per day between January this year and March 2018 to bolster prices. Though not yet finalized, oil ministers have also signaled they are likely to extend the agreement until the end of next year.

Last week, consumer group Laban Konsyumer Inc. (LKI) urged the DOE along with other government agencies to issue show cause letters against oil companies in relation to the string of oil price hikes implemented in the last five weeks.

Victor Dimagiba, LKI president and former trade undersecretary, said in a letter the DOE has enforcement powers to initiate and conduct such investigation on its own initiative.

“The consumers would welcome proactive action from DOE in lieu of the weekly advisories that appears to be a template report and gives suspicion that the DOE is the press relation officer of the oil companies,” Dimagiba said.

“The investigation must include an inquiry as to whether price fixing exists as the amount of weekly increases are almost the same across the oil companies,” he added.

Alfonso Cusi, energy secretary, said he has yet to see LKI’s letter to the DOE, even as the agency reconvened a task force with the Department of Justice to investigate the basis for the increase implemented by oil firms and whether there is anti-competitive behavior.
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