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Rollback in local fuel prices seen this week

Rollback in local fuel prices seen this week

By Karl R. Ocampo, Inquirer Business

A minimal rollback in local pump prices is expected this week after US President Joe Biden announced the release of oil from the country’s strategic petroleum reserve.

Local oil firm Unioil projected on Saturday a reduction in diesel and gasoline prices next week by P1.80 and P2 per liter, respectively.

The unprecedented decision by Biden to release 180 million barrels of oil over the next six months sent oil prices below $100 a barrel, although the price of Dubai crude — the Asian bellwether — remained above $100 at $110.89 a barrel as of Saturday.

The ongoing Russia-Ukraine war also continued to be a huge factor in the global oil market, given the sheer size of Russia’s potentially sanctionable exports of 3 million barrels a day.

Currently, local prices at the pump are hovering between P70 and P80 per liter, depending on the grade. Since January, prices of gasoline and diesel have increased by P18.30 and P27.85, respectively.

Local fuel prices move on a weekly basis and are mainly hinged on the movements of Dubai crude, the Asian bellwether. For finished petroleum products, the index reference is the Mean of Platts Singapore.

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Analysts usually release projections of fuel price movements on Friday or over the weekend to cover the entire weekly trading.

As a rule of thumb, every dollar reduction in oil prices results in a decrease of between P0.27 to P0.30 a liter, and for every change in the peso-dollar exchange, local pump prices decrease by P0.13 to P0.15 a liter.