MANILA — World crude prices have been on a downward trend in recent weeks, fueling expectations that prices would not breach the USD80 per barrel in the remaining months of the year, the country’s top energy official said.
In a briefing at Malacañan Palace Wednesday, Department of Energy (DOE) Secretary Alfonso Cusi said forecasts from oil-exporting countries show that world oil prices would remain within the USD70-level per barrel.
Cusi cited developments that caused world oil prices to go down mainly due to the increase in production of Organization of the Petroleum Exporting Countries (OPEC) member-states, which hit its highest output last month in almost two years.
Saudi Arabia, Libya, and, the United Arab Emirates pushed for higher output of up to 390,000 barrels a day, Cusi added.
He said the softening of the United States’ sanctions on Iran after granting waivers to eight importers that temporarily allow them to source oil, also tamed world oil prices.
With these developments in the world market, the energy chief said a rollback in local pump prices is expected next week.
“We are projecting that there will be (a) rollback again next week because of the improvement in the price of oil in the international market,” Cusi said, adding that declining pump prices will further help slow down inflation.
Local oil firms have implemented significant rollbacks in pump prices for four weeks in a row.
According to Department of Finance (DOF) Assistant Secretary Antonio Joselito Lambino II, oil prices only cover 3 percent to 10 percent of production costs, and that oil price movement has a direct effect on household fuel users and vehicle owners.
Despite the downward trend in oil prices, Lambino noted that the economic managers’ recommendation to suspend the implementation of the next tranche of oil excise tax will remain, but a review of the recommendation before its implementation next year is “ideal”.
“The economic managers submitted the recommendation to suspend the next tranche of the excise (tax) scheduled for January 2019 — that recommendation stands. It is an official document that we need to receive from the Office of the President in order to implement the recommendation,” he said.
The DOF official noted that the recommendation was made at a time when crude prices breached the USD80-per-barrel level and it is expected to stay in the coming months.
“Ideally, we want to have a review before implementing it at some point next year,” Lambino said in Filipino. PNA-northboundasia.com