by Lenie Lectura, February 8, 2015
Consumers should expect an increase in local pump prices this week, as well as an upward adjustment in their electricity bills, an industry source said.
The industry source said there will be a price hike of about P2 per liter on petroleum products, reflecting the movements in the international market.
Asian benchmark Dubai crude, said the source, rose by an average of $7.50 per barrel last week over the previous week. The surge can be attributed to weak US economic data and the announcement of oil majors that they will cut capital expenditures for 2015.
This has fueled speculation that reduced investments will curb crude-oil production. For February, Dubai crude is averaging $52 per barrel versus the January average of $45.50 per barrel, representing a 14-percent increase.
Moreover, MOPS (Mean of Platts Singapore) gasoline increased by $8.50 per barrel last week versus the previous week’s average.
Gasoline was supported by possible strikes in several US refineries ahead of the summer driving season. Gasoline is averaging nearly $66.00 a barrel in February versus January’s full-month average of just over $57.00 a barrel.
Meanwhile, Asian diesel prices increased by an average of $6.00 a barrel last week compared to the price recorded a week ago. The hike was supported by lower stockpiles in Japan and demand from other Asian countries ahead of maintenance turnarounds at several refineries.
“With these developments, local pump prices are expected to rise in the range of P2.00 a liter. This will be the first major price hike for the year,” said the source.
Since the start of the second semester of 2014, when international oil prices started to drop until the first week of February 2015, gasoline and diesel have gone down by P18.00 to P19.00 per liter.
Since the start of 2015, gasoline prices have declined four times or a total of P3.60 per liter while diesel prices have rolled back times or a total of P4 per liter.
Meanwhile, the Manila Electric Company (Meralco) said higher electricity rates will be reflected in the consumers’ electric bills due to higher generation charge. Meralco will announce the adjusted figures this week.
The adjustment, Meralco President Oscar Reyes said, can be attributed to the frequent power plant outages.
“The price at the spot market, we can’t estimate that. Remember that WESM (Wholesale Electricity Spot Market) prices are a supply and demand thing. Although we are sourcing only a small portion of our requirements at the WESM, it still affects the overall power rates. Yes, there may be higher generation charge in February,” said Reyes.
Meralco said it is closely monitoring prices at the spot market.
“We are awaiting the billing of WESM to see how all these outages affected spot market prices,” said Meralco utility economics head Larry Fernandez last week.
In terms of share to Meralco’s total power requirements for the December 2014 supply month which were reflected in the January 2015 electricity bills, the power supply agreements (PSAs), Independent Power Producers (IPPs), and WESM accounted for 52, 45, and 3 percent, respectively.
Generation charge has been low in the past months but Meralco said this series of lower generation charges may be difficult to sustain, especially since the Malampaya gas facility would be shut down during the summer months or from March to April.
Meanwhile, a resolution calling for an investigation of high electricity cost in the Philippines has been filed at the House of Representatives.
House Resolution 1819, authored by Liberal Party Rep. Alfredo Benitez of Negros Occidental, directs the Committee on Energy to conduct an inquiry, in aid of legislation, on the continuous high cost of electricity despite the decrease in the global price of coal—a major source of energy generation in the country.
Citing a report from the Department of Energy, Benitez said that as of 2013, over 36 percent of total power generation in the Philippines today comes from coal energy, making it the highest percentage among other forms of energy sources.
“Despite the recent plunge in coal prices, the cost of electricity in the country still remains one of the highest among Asian countries,” Benitez said.
“It is undeniable that Filipinos continue to feel the burden of paying the high cost of electricity in the country and that recent surveys reveal that the Philippines ranks atop the nations with the highest electricity rates in Asia,” he added.
According to Benitez the global price for thermal coal has gone down from a high of $85 per metric ton (MT) in 2013 to as low as $48.6 per MT as of January 2015.
with Jovee Marie N. dela Cruz