Oil prices drop; power rates stable

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    After last week’s announcement of a lower inflation rate in September, consumers are in for more good news as fuel prices are down while power rates are stable.

    Oil firms are rolling back their prices for the second consecutive week effective today, October 8, as global crude costs were dampened by last week’s release of weak services sector growth data in the United States.

    According to the Department of Energy (DOE), the latest average Manila price per liter of gasoline (RON95) is at P53.69, diesel at P44.95 and kerosene at P50.05.

    Shell and Seaoil cut the price of gasoline by P0.80 per liter, diesel by P1 per liter and kerosene by P1.15 per liter.

    Phoenix Petroleum and PTT adjusted prices downward by P0.80 per liter for gasoline and P1 per liter for diesel.

    The DOE said as of October 1, year-to-date adjustments stand at a net increase of P6.41 per liter for gasoline, P5.22 per liter for diesel and P2.76 per liter for kerosene.

    Reuters reported that as of last Thursday, US crude went down to $52.45 a barrel while Brent crude settled at $57.71 a barrel.

    The report cited analysts explaining that the price movement was triggered by the fact that US services sector experienced its slowest pace in three years paired with a job growth figures that were considered to be the weakest in five years.

    The experts noted that the only positive factor that affected last week’s oil prices is the optimism that US and China may soon resolve their trade dispute.

    Meanwhile, ahead of its official announcement for this month’s rate adjustments, Manila Electric Co. (Meralco) expects a flat change for October rates.

    Lawrence Fernandez, Meralco vice president and head of utility economics, told reporters yesterday generation costs are likely to go down this month r but its effects to the overall power rates for the month may be offset by the smaller net settlement surplus (NSS) refund they will receive from the Philippine Electricity Market Corp. (PEMC).

    “It will be recalled that part of the September reduction was due to an almost P700 million NSS refund, which ERC (Energy Regulatory Commission) directed PEMC to implement. The refund amount for October is anticipated to be smaller (at less than P400 million.) Given the two factors, we expect power costs to remain stable, after five consecutive months of reductions,” Fernandez said.

    Meralco’s fifth consecutive downward rate adjustment last month led to an overall rates of P9.0414 per kWh, mainly attributed to lower cost of electricity from the wholesale electricity spot market.

    The ERC earlier ordered a refund on NSS citing a correction on its computation that involved an estimated amount of P1.774 billion. Total refunds to Luzon and Visayas consumers amounted to P1.403 billion as 77 percent or P1.08 billion of it were refunded to consumers in the Meralco franchise area.

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