DOE: Tight supply, high demand pushing up oil prices, situation unlikely to change in 2021


Posted at Oct 19 2021 02:41 PM

MANILA - The Department of Energy (DOE) on Tuesday said that tight supply in the international world market and high demand are behind the rising oil prices with the situation unlikely to change until the end of the year.

“Unang dahilan ng pagtaaas yung aggressive economic activities, nag open up na mga economy, iba ibang sector pumapasok na at the same time marami nang industries na nag-open up,” said Assistant Director Rodela Romero of the DOE Oil Industry Management Bureau.

(Aggressive economic activities--economies and other sectors are opening up--is one of the reasons of oil price hike.)

Romero said on the supply side, the unresolved issues on Iran nuclear deal, sanctions on Venezuela and the hurricane that hit the Gulf of Mexico where most of the oil-producing facilities of the United States were affected.
“Base sa forecast data parang hanggang end of December may deficit tayo na 2.91 million barrels per day,” said Romero.

(Based on the forecast data we have a deficit of 2.91 million barrels per day until the end of December.)

Romero said the OPEC held a meeting earlier this month to discuss to assess the world supply market. She said another meeting is set for November.

“Ang OPEC nasa kanila ang kapangyarihan kung paano magdadagdag pa ng supply sa world market kaya parang naka wait and see sila. Hindi tayo basta makapagbigay ng projection kasi baka samantalahin naman talaga, mas lalong magkaroon ng disruption sa balance between supply and demand. Hindi tayo makapagbigay ng final pronouncement kasi naka wait and see ang OPEC at may meeting this November,” she said.

(OPEC has the power to increase the supply in the world market so it's still a wait-and-see situation. We cannot just give a projection as this may cause a disruption between the supply and demand. We cannot make a final pronouncement because OPEC will still meet this November.)

Romero said refiners have an inventory of raw materials and finished petroleum products good for 30 days while importers have a 15-day buffer and 7 days for LPG.

“Assurance lang po yun na merong talaga tayong supply,” she said.

The DOE, she said, is continuously monitoring domestic oil prices. At the same time, the DOE is conducting inspections to ensure the quality of products being sold in the market.

“Patuloy yung ginagawa naming price monitoring pati po dito sa domestic price sa sitwasyon natin para mapansin na walang pang-aabuso,” she said.

The department also met with oil companies last week and asked for the list of all promotional campaigns and freebies they extend to the transport sector to further disseminate it to the public.

“Sa ngayon meron kaming listahan ng mga gasolinahan na nandoon ang mga discounts nila,” she said.

(For now we have a list of gasoline stations with their offered discounts.) 

Oil firms were also asked by the DOE to submit their importation or supply plan.

“Nagsisimula na rin silang magsubmit ng mga plano kung paano makakakuha ng assurance ng supply ang Pilipinas. Very supportive naman ang oil companies na ibigay kung ano ang kaya nilang ibigay,” she said.

(They are now submitting their plans on how to get supply assurance for the Philippines. Oil companies are very supportive and are willing to give what they can.)

Jeepney drivers earlier filed a petition for a fare hike before the LTFRB amid the pice hike.