Upward trend in oil prices will persist throughout H1
In the first half of this year, consumers should prepare for continued increases in fuel prices, as global oil prices are expected to remain on an upward trajectory. According to sources closely monitoring oil markets, the trend is likely to persist until the second quarter, influenced by several factors.
Conflicts in the Middle East and disruptions in oil supply routes, such as diversions from the Red Sea to longer routes around South Africa, are contributing to higher freight rates and war risk insurance costs. Additionally, ongoing supply cuts from the Organization of the Petroleum Exporting Countries and its allies (OPEC+) are expected to continue exerting upward pressure on prices throughout the year.
These sustained price increases pose challenges for consumers, as weekly adjustments in domestic pump prices reflect movements in the global oil market. The Philippines, being solely reliant on imported fuel, is particularly vulnerable to these fluctuations.
Energy Secretary Raphael Lotilla acknowledged the volatility in oil prices, citing geopolitical tensions as a significant factor. He emphasized the need for long-term planning and investment in the energy sector to address infrastructure needs and reduce dependence on imported fuels.
Despite efforts to mitigate the impact of high fuel prices, such as promoting alternative fuels and energy conservation campaigns, there is no single solution to the issue. The country must explore indigenous resources, accelerate renewable energy and biofuel programs, and prioritize energy efficiency measures.
Lotilla highlighted the importance of transitioning to electric vehicles (EVs) to address future oil price spikes. The government’s roadmap for the EV industry sets ambitious targets for EV adoption, aiming for at least 10 percent EV share in all sectors by 2040. This shift to clean energy not only aligns with customer preferences but also contributes to savings and reduces dependency on imported fuels.
In response to the anticipated price hike, oil companies have announced increases in pump prices for gasoline, diesel, and kerosene. The adjustments are expected to take effect today, further adding to the burden on consumers already grappling with rising fuel costs.
News: Upward trend in oil prices will persist throughout H1
