OIL prices are up for the fourth consecutive week while power rates in the franchise area of the Manila Electric Co. (Meralco) are likely increase this month.
Seaoil and Caltex increased per liter prices by P1.60 on gasoline, P0.65 on diesel and P0.60 on kerosene.
Clean Fuel and Jetti adjusted per liter prices upward by P1.60 of gasoline and P0.65 on diesel.
Today’s fuel price movements were mainly caused by the effects of strong fuel demand for the summer driving season in the United States as well as the potential supply disruptions of a hurricane in the Gulf of Mexico.
Data from the Department of Energy (DOE) as of July 2 showed Manila price per liter of gasoline (RON91) stood at P64.90, diesel at P61.90 and kerosene at P74.39.
DOE data also showed year-to-date adjustments as of the same date stood at a total net increase of P9.25 per liter for gasoline, P8.40 per liter for diesel and P1.75 per liter for kerosene.
Local pump prices of fuel have increased for four straight weeks from June 18 until today (July 9) for a total per liter increase of P4.80 for both gasoline and diesel and P3.90 for kerosene.
Meanwhile, Meralco attributed the higher electricity cost this month to the amortization of deferred charges.
Initial indications of the company cite strong pressures for the generation charge to increase this month.
“To recall, the generation charge saw a reduction in June, after ERC (Energy Regulatory Commission) directed the staggered collection of WESM (Wholesale Electricity Spot Market) charges over a four month period. Thus, from an artificially low level in June, we should expect WESM charges to normalize in the July generation charge,” said Lawrence Fernandez, Meralco vice president and head of utility economics department, in a message to reporters.
Fernandez added WESM charges will also be affected by the series of red alerts experienced by the Luzon Grid at the start of the June supply month but this should be mitigated by the lower demand due to the onset of the rainy season.
However, Fernandez said on top of the normalization of WESM charges, amortization of deferred charges estimated at 77 centavos per kilowatt hour (kWh) will also add upward pressure on power rates.
Last month, Meralco implemented a P1.9623 per kWh decrease in its rates mainly driven by the ERC’s order to implement staggered collection of generation costs from the WESM.
