Gasoline price increasing by PhP2 as middle east reduces production

Fuel prices are expected to rise tomorrow as Shell issues a fuel price increase effective tomorrow, May 12, 2020 at 6 AM. The price per liter of gasoline will increase by PhP2.00 per liter.

Other fuel produces may also raise prices between PhP2.00 to PhP2.25 per liter of gasoline.

The fuel price increase is the result of Brent Crude oil futures rising as a result of middle eastern and OPEC partner oil producers coming to an agreement to drastically cut oil production and reduce exports in a bid to rebalance the oil market.

This may be just the beginning of the oil price rebound. Last week, the Philippine government announced the imposition of an additional 10% tax on fuel to “sufficiently finance the programs and measures to mitigate the effects of the coronavirus situation.” The additional tariff is under the new EO 113.

In addition, Shell Philippines also announced that it will halt operations in its 110,000 barrel-per-day Tabangao refinery facility in Batangas sometime in May of this year. The move is in response to a drastic reduction in local fuel demand and “a significant deterioration of regional refining margins.” Shell will use the downtime to conduct maintenance activities in the refinery. While the refinery is shut down, the company will rely on imported fuel until the situation stabilizes.

These two developments have yet to take effect on the already rebounding price of fuel.