Oil price hikes seen continuing in H1

Consumers should brace themselves for further spikes in fuel costs throughout the first half of the year, as global oil prices are expected to continue their uptrend.

- RICHMOND MERCURIO

Sources closely monitoring oil prices told The STAR that expectations are for prices to follow a generally increasing trend through the second quarter.

The forecast uptrend is due to various factors, such as sentiments resulting from conflicts in the Middle East, as well as diversions of oil supply from the Red Sea to longer haul around South Africa, causing higher freight rates, and war risk insurance for Red Sea transits.

Ongoing supply restraint from OPEC+ would also likely remain this year.

Sustained increase in oil prices does not bode well for consumers, as weekly domestic pump price adjustments reflect movement in the international oil market.

The Philippines is purely dependent on imported fuel, both crude and finished products.

“It’s the volatilities that we have to deal with. Let’s hope that the geopolitical tensions are reduced. External factors are really the main causes,” Energy Secretary Raphael Lotilla told The STAR.

Under the Downstream Oil Industry Deregulation Act of 1998, the Department of Energy (DOE) is only authorized to monitor both the international and domestic price movements of petroleum products, as well as the compliance of businesses with national standards.