Power, oil prices down

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    Consumers can expect some relief as power rates and prices of some petroleum products are down.

    Manila Electric Co. (Meralco) said August power rates will go down by P0.2055 per kilowatt hour (kWh due to lower generation charge as prices in the wholesale electricity spot market (WESM) continue to slide.

    The fourth consecutive downward rate adjustment will be equivalent to a decrease of around P41 in the bill of a residential customer consuming 200 kWh monthly. It brings overall power rates to P8.4911 per kWh from last month’s P8.6966 per kWh.

    Meralco said with five straight months of generation rate reduction and a total rate decrease of more than P1 per kWh since the start of the year, this month’s overall rate is the lowest in nearly three years, since September 2017.

    From P4.3344 per kWh in July, the generation charge decreased by P0.2103 per kWh to P4.1241 per kWh this August.

    Meralco said apart from lower prices of electricity from WESM, reduction in charges from independent power producers (IPPs) and the stronger performance of the peso against the dollar also helped bring down power costs.

    WESM charges were P1.12 per kWh lower this month due to improved supply situation in the Luzon grid with lower average plant capacity on outage. The cost of power from IPPs decreased because of lower natural gas prices as a result of quarterly repricing.

    Meanwhile, purchases from power supply agreements (PSAs) inched up by P0.2722 per kWh due to lower average plant dispatch and lower force majeure (FM) claims this month compared to the previous month.

    FM claims for the month totalled to about P82 million, equivalent to customer savings of P0.0285 per kWh in the generation charge as total savings generated from FM claims for the past five months hit P1.9 billion.

    Transmission charge for residential customers registered a slight reduction of P0.0081 per kWh due to lower ancillary service charges which more than offset the P0.0129 per kWh net increase in taxes and other charges.

    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 for the past 61 months.

    The company said 15.5 percent of the total power requirements for the month were from WESM while PSAs and IPPs had accounted for 50.6 percent and 33.9 percent, respectively.

    Meanwhile, fuel price movements are mixed effective today, August 11, to reflect developments in global crude costs which continue to be volatile due to the uncertainties brought by the pandemic.

    According to the Department of Energy (DOE), the average Manila price per liter of gasoline (RON95) is now at P47.73; diesel, P36.16 and; kerosene, P38.07.

    Pilipinas Shell and Seaoil adjusted the per liter price of gasoline upward by P0.25 but cut the per liter price of diesel and kerosene by P0.20 and P0.35, respectively.

    PTT and Phoenix Petroleum raised prices of gasoline by P0.25 per liter but reduced the cost of diesel by P0.20 per liter.

    As of August 4, year-to-date adjustments on fuel prices sum up to a net decrease of P5.02 per liter for gasoline, P8.59 per liter for diesel and P12.69 per liter for kerosene.

    Reuters reported that as of Friday last week, Brent crude fell 69 cents to settle at $44.40 a barrel while US West Texas Intermediate crude declined by 73 cents to end at $41.22 a barrel.

    Rino Abad, director of the Oil Industry Management Bureau, said the country has ample supply of petroleum products even if the two local crude refineries have temporarily stopped operations due to low margins.

    “Our latest minimum inventory report (showed) we have 63 days supply of petroleum products. That is too much, our requirement before was 15 days for finished products, 30 days for refinery and 7 days for LPG. To have that high amount of two months’ worth of supply, we don’t need refinery production to further increase or else they (oil companies) will continue to lose a lot of money,” Abad said.

    The DOE said the 10-percent tax on crude and petroleum products under Executive Order No. 113 is no longer imposed following the expiration of the Bayanihan Law expired last June 25.