Oil prices are up after last week’s rollback.
Meanwhile, the Manila Electric Co. (Meralco) said power rates in its franchise area would likely increase this month.
Caltex and Seaoil increased per liter prices by P0.10 of gasoline, diesel and kerosene. Clean Fuel, PTT and Jetti raised per liter prices by P0.10 of both gasoline and diesel.
Today’s price movements were attributed to the market’s reaction on the United States’ effort to contain regional tensions in the Middle East.
Data from the Department of Energy (DOE) as of January 2 showed Manila price per liter of gasoline (RON95) stood at P64.83, diesel at P59.20 and kerosene at P72.04. Year-to-date adjustments stood at a total net decrease of P0.10 per liter for gasoline, P0.35 per liter for diesel and P1.40 per liter for kerosene.
Reuters reported that as of Friday last week, Brent crude futures settled at $78.76 a barrel while US West Texas Intermediate crude futures ended at $73.81 per barrel.
Analysts said because of ongoing tensions in the Middle East, trading premium is being pushed. Traders said this may worsen if more shipping companies will copy Maersk’s move to divert all vessels away from the Red Sea to avoid pirates, a move which cause supply disruptions.
In addition, sentiments were influenced by a report US employment grew in December that would push fuel demand this year.
But apprehensions persist on rumors the US Federal Reserve will start cutting interest rates by March.
Meanwhile, Meralco cited the possibility of higher generation charge, specifically from the Wholesale Electricity Spot Market (WESM) would result in a “minimal” rate hike this month.
“We are completing the billing from our suppliers, but initial indications show there may be a very minimal increase in the generation charge in the January bills. This may be due to higher WESM charges, likely driven by the increase in average capacity on outage in the Luzon grid, which is higher by around 418 megawatts (MW) in the last supply month,” said Joe Zaldarriaga, Meralco vice president and head of corporate communications.
Zaldarriaga in a statement said power plants went on outage on scheduled maintenance shutdown in preparation for the summer months.
Meralco urged customers to be mindful of their consumption while assuring power supply is sufficient.
“We recently launched the competitive selection process for interim power supply agreements covering 260 MW peaking and 400 MW baseload requirements, which we target to be ready in time for the summer months when demand usually spikes,” Zaldarriaga said.
Last month, Meralco implemented a P0.7961 per kilowatt hour (kWh) reduction in its rates due to lower generation charges driven by lower charges from power sourced from both WESM and independent power producers.
The said adjustment was equivalent to a decrease of around P159 in the bill of a residential customer consuming 200 kWh monthly and brought overall power rates to P11.2584 per kWh from the previous P12.0545 per kWh.
