Oil prices are rolled back for the second straight week but power rates in Metro Manila are poised to go up this month.
The oil price rollback is attributed to the announcement by the International Energy Agency and the United States they will release crude from their strategic stocks.
According to the Department of Energy (DOE), as of April 5, the latest average Manila price per liter of gasoline (RON95) stood at P72.30, diesel, P70.80 and kerosene, P74.16.
Seaoil cut per liter prices by P1 on gasoline, P0.35 on diesel and P3 on kerosene. PTT, Phoenix Petroleum and Clean Fuel adjusted per liter prices downward by P1 on gasoline and P0.35 on diesel.
The DOE said as of April 5, year-to-date adjustments of petroleum products summed up to net increase of P16 per liter for gasoline, P26 per liter for diesel and P24.10 per liter for kerosene.
Reuters reported that as of Friday last week, Brent crude futures settled at $102.78 a barrel while US West Texas Intermediate crude futures ended at $98.26 per barrel.
Member-nations of IEA announced they will release 60 million barrels of crude from strategic petroleum reserves over the next six months with the US matching the amount.
However, analysts warn artificially lowering prices may increase demand and burn off the extra supply quickly apart from the fact that the release may deter producers, including the Organization of the Petroleum Exporting Countries and American shale producers from accelerating output increases even with oil prices around $100 a barrel.
Experts say demand uncertainties are pulling down global crude after China extended the lockdown of Shanghai to address fast-rising COVID-19 infections.
Meanwhile, despite a new round of generation companies’ deferment of charges, power rates in areas covered by Manila Electric Co. (Meralco) will go up for the second straight month due to higher generation charges.
The P0.5363 per kilowatt hour (kWh) upward rate adjustment brings overall power rates of Meralco to P10.1830 per kWh from last month’s P9.6467 per kWh. This is equivalent to an increase of around P107 in the total bill of residential customers consuming 200 kWh monthly.
Meralco said the increase could have reached over P1 per kWh if not for the Energy Regulatory Commission’s (ERC) order for the company to defer collection of P300 million in in generation costs as well as power generation companies’ decision to defer a total of around P945 million in generation charges, or a total of P1.2 billion this month
Lawrence Fernandez, Meralco vice president and head of utility economics department, said in a briefing yesterday collection of the P1.2 billion will be amortized without interest from May to July equivalent to 15 centavos per kwh additional charge each month.
Fernandez said the P1.2 billion is on top of the P500 million that was also deferred by generation companies last month which will be collected as a 6 centavo-per kWh additional charge from April to June this year.
Meralco said apart from deferred generation charges, its refund of P18.7 billion in distribution-related charges also helped temper this month’s increase. This is equivalent to a total refund of P0.4684 per kWh for residential customers as ordered by the ERC that will be paid for at least 24 months.
For this month, generation charge went up by P0.3987 to P5.8724 per kWh from the P5.4737 per kWh registered the previous month due to higher charges mainly from independent power producers (IPP) and the wholesale electricity spot market (WESM).
Charges from IPPs increased by P1.4885 per kWh because of the scheduled maintenance of a major coal-fired power plant, the continued failure of the Malampaya gas resource to supply sufficient natural gas fuel as well as the peso’s depreciation against the US dollar.
Spot prices in the WESM increased in March due to higher demand but charges from power supply agreements were lower by P0.1068 per kWh due to the deferral of generation costs.
Transmission charge for residential customers rose slightly to P0.0071 per kWh, while taxes and other charges registered a net increase of P0.1305 per kWh mainly because of higher generation costs as the collection of P0.0025 per kWh representing the Universal Charge-Environmental Charge remains suspended.
Meralco’s interim distribution rates comprised of distribution, supply and metering charges, the only bill component paid to the company remained at P1.381 per kWh since July 2015.
Meralco said generation rates are expected to increase in the coming months. Next month’s generation charge will reflect the re-pricing of Malampaya gas which is benchmarked from Dubai crude prices that have been in an upward trend.
“Hopefully, there are other factors to overturn the expected increase like spot market pricing, demand in the Meralco franchise area and foreign exchange rates. We cannot predict other factors and how it will either aggravate or mitigate the impact so we need to wait. But at some point, there is still pressure for rates to go up in May but there are some other factors also in play so its kind of too early to say,” said Joe Zaldarriaga, Meralco spokesperson.
