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Oil prices to increase ahead of Christmas

Motorists will have to pay more for fuel ahead of the Christmas holidays.

Starting this morning, gasoline prices will increase by P0.75 per liter, while diesel prices will go up by P0.85 per liter.

Prices of gasoline will increase by P0.75 per liter, while diesel will go up by P0.85 per liter starting this morning* Roger Beltran photo

The announcement came from oil players, such as Cleanfuel, Petro Gazz, Seaoil, Shell, and Total.

Seaoil and Shell will likewise implement a price hike on kerosene products by PP0.80 per liter.

This is the seventh consecutive week of price increases for diesel and kerosene while gasoline prices have been on the rise for four straight weeks.

Meanwhile, strong domestic fundamentals, along with the gradual reopening of the domestic economy and the continued build-up of foreign reserves, are expected to further boost the strength of the peso.

In a briefing, Bangko Sentral ng Pilipinas Governor Benjamin Diokno said the peso continues to show resilience even during the pandemic as the “market continues to focus on the Philippines’ strong macroeconomic fundamentals.”

As of Dec. 10, the local currency has appreciated by around 5.35 percent against the greenback after it closed the trade at P48.07 vis-à-vis its P50.41 closing level in end-2019, he said.

The economic managers’ peso-US dollar assumption for this year has been revised to P48-50 while it is between P48-53 for 2021-2022.

Diokno attributed these developments partly to the government’s ability to manage its debt, citing the Philippines’ favorable ranking among emerging market economies.

Other factors that support the peso include the gradual recovery of foreign direct investments and remittances, the affirmation of the country’s credit ratings, increase in foreign exchange reserves, the national government’s US dollar deposits with the central bank, and gains from BSP’s investments overseas.

“The BSP believes that the key to keeping the stable performance of the peso is to preserve the country’s sound macroeconomic fundamentals and continued adherence to a market-determined foreign exchange policy,” Diokno said.

For 2021, he said the local currency “should continue to reflect emerging demand and supply conditions in the foreign exchange market as well as continued soundness in the country’s macroeconomic fundamentals.”

Diokno, however, said risks remain and these include concerns on the upticks in coronavirus disease infections, OFW deployment, tourist arrivals, and the availability and deployment of Covid-19 vaccines.

Among the positive impacts of the peso’s appreciation against the greenback include the drop in the peso equivalent of the government and private sector’s foreign debt. “In this sense, when the peso appreciates, then the country will spend less pesos for servicing foreign-denominated debt, hence, enabling it to realize savings, which can then be used to fund essential public expenditures,” Diokno added.*PNA

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June 2021

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