FUEL prices break their four-week uptrend while power rates are poised for a hefty increase this month.
Local pump prices have increased from June 18 to July 9 for a total per liter increase of P4.80 for gasoline and diesel, and P3.90 for kerosene.
This week, Caltex and Seaoil reduced per liter prices by P0.60 on gasoline, P0.95 on diesel and P1.15 on kerosene. Jetti and PTT adjusted per liter prices downward by P0.60 on gasoline and P0.95 on diesel.
Today’s fuel price movements were mainly caused by the effects of weaker American consumer sentiments against an expected interest cuts by the US Federal Reserve in September.
Data from the Department of Energy (DOE) as of July 9 showed Manila price per liter of gasoline (RON91) stood at P65.20, diesel at P62.55 and kerosene at P75.41.
DOE data also showed year-to-date adjustments as of the same date stood at a total net increase of P10.85 per liter for gasoline, P9.05 per liter for diesel and P2.35 per liter for kerosene.
Reuters reported that as of Friday last week, Brent crude futures ended at $85.03 a barrel while US West Texas Intermediate crude futures settled at $82.21 per barrel.
Meanwhile, power rates in areas covered by the franchise of the Manila Electric Co. (Meralco) are up P2.1496 per kilowatt hour (kWh) this July.
This brings overall power rates of Meralco to P11.6012 from last month’s P9.4516 per kWh.
The adjustment is equivalent to additional P430 in the total bill of residential customers consuming 200 kWh monthly.
Meralco said overall rate increase was primarily due to higher generation charge as power costs normalized following artificially low rates last month.
The company said generation charge went up this July as Wholesale Electricity Spot Market (WESM) charges returned to normal levels as a result of the Energy Regulatory Commission’s (ERC) directive to stagger the collection of the charges for the May supply month in four equal monthly installments until September 2024.
The directive is on top of the ERC’s clearance to stagger the collection of around P500 million in May generation costs until September, following Meralco’s request, along with Quezon Power (Philippines) Ltd., San Buenaventura Power Ltd. Co. and South Premiere Power Corp. under its 2024 emergency power supply agreement.
Meralco said for the July billing, WESM charges were higher by P6.6370 per kWh, as charges not only normalized but also reflected the recovery of a portion of deferred WESM costs from the May supply month.
The increase was slightly mitigated by the reduction in spot market prices as average demand in the Luzon grid decreased by about 900 megawatts.
Meralco added that charges from Independent Power Producers (IPPs) also increased by P0.4392 per kWh due to higher fuel costs and lower average plant dispatch as charges from Power Supply Agreements (PSAs) also went up by P0.3530 per kWh.
However, transmission charge went down by P0.1550 per kWh due to the absence of reserve market settlement charges that affected last month’s ancillary service charges but taxes and other charges registered a net increase of P0.3025 per kWh.
This month’s rates also included an adjustment in generation, transmission, system loss, and lifeline subsidy charges, under the ERC rules governing automatic cost adjustments and true-up mechanism for pass-through charges.
Pass-through charges for generation and transmission are paid to the power suppliers and the grid operator, respectively, while taxes, universal charges, and feed-in tariff allowance are all remitted to the government.
Lawrence Fernandez, Meralco vice president and head of utility economics department, yesterday hinted the possibility power rates may go down next month as price of power from WESM has been decreasing.
“This July, there are five days of red alert from the June supply month. Despite that, an offset from low power demand in the following days happened. Hopefully, if this continues, it will bring down generation charge for August,” Fernandez said.
In a statement, ERC chair Monalisa Dimalanta said Meralco’s power rate increase this month is expected, particularly since the company has implemented two staggered payment schemes.
“Bulk of Meralco’s supply comes from its IPPs. Admittedly, though, the P2.0021 per kWh generation rate increase is higher than expected. In any event, the rates are subject to the Commission’s validation pursuant to our cost adjustment over or under regulations,” Dimalanta said.