What is Happening?
Philippine oil prices have been continuously rising in a trend that has been going on for the past 8 weeks. On October 19, certain oil companies increased the prices of all their oil products.
The new prices are now P1.80 per liter for gasoline, P1.50 per liter for diesel, and P1.30 per liter for kerosene.
This has caused the current retail pump prices of unleaded gasoline and regular diesel in Metro Manila to shoot up to P70.44 per liter and P50.17 per liter respectively.
Why are prices increasing?
The sudden increase in prices has been attributed to the returning demand for transportation similar to levels before the lockdowns. The Metropolitan Manila Development Authority (MMDA) also noted that EDSA has reached its pre-pandemic levels of traffic after almost 2 years.
With the decrease in COVID-19 cases, more Filipinos are going outside, thus using more cars. Public transportation such as jeepneys, FX (UV Express vehicles), and buses are also being used by more people as the risk of going out gradually decreases in conjunction with active cases.
Another reason may be that the supply of crude oil, which is used to make products like diesel and kerosine, has been dwindling due to the temporary shutdown of U.S firms caused by the landfall of Hurricane Ida on America’s southern coast.
The Department Of Energy (DOE), stated that at least 294,414 barrels per day or 16.18% of oil production in the Gulf of Mexico and 24.27% of gas production remained offline as of Sept. 23, “with full recovery not expected to resume until Q1 2022.”
What are the implications?
Although rising oil prices may indicate that there are certain industries that are gradually returning to their pre-pandemic levels, for most Filipinos, this rise has been met with disaster. As many Filipinos are gradually returning to work now, many of them have been struggling to pay for the rising prices. In response to this, the Department of Transportation (DOTr) said that it will be looking to provide financial aid to Filipinos like jeepney and FX drivers who have been hit by the price hike the most.
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