Chevron to raise fuel prices by P1 per liter, other oil firms to follow

(Updated 7:12 p.m.) Amid fears of possible oil supply disruptions because of unrest in the Middle East and North Africa, Chevron Philippines Inc. (formerly Caltex) will increase the price of all its petroleum products by P1 per liter effective midnight tonight. All gasoline products, diesel, and kerosene are covered by the price increase, the company said in a text message to media organizations. The increase is the second batch of the price adjustments this week. Independent oil player Flying V said it will also increase its prices in the coming days. “We will increase our prices by one peso across our products probably on Saturday," Flying V president and CEO Ramon Villavicencio said. Last week the price of benchmark Dubai crude rose more than $5U a barrel, bringing the price of fuel to more than $100 a barrel. Another round of increase Another round of increase is likely to follow next week as world prices of crude oil continue go up. “We expect gasoline to increase by another ninety centavos per liter next week and diesel to increase by P1.25 per liter. That can go higher or lower depending on the movement of international price in the coming days," Villavicencio said. In spite of the uptick in prices, the Energy Department said the present supply situation remains stable. The average inventory of crude oil and finished products of the “Big Three" can last 30 to 45 days. Meanwhile, inventory of finished products of independent oil players currently stands at 10 to 45 days relative to the company. Flying V said that while its depot currently holds 10 days worth of inventory, another batch of petroleum is already in transit. “I’m supposing we can come up with 15 days inventory once our new stocks arrive," said Villavicencio. Flying V has a storage facility that can hold up to 70 days of inventory. Raising inventory levels In a recent circular, the Energy Department asked oil companies to raise its inventory levels and make sure that supply is uninterrupted despite the unrest in the Middle East and North Africa, particularly in Libya. Oil refiners are expected to hold a stock inventory for 30 days. Direct importers, meanwhile, must have a 15-day inventory. “The supply situation is not bad. There is no need to worry. We are just laying out our contingency plans. We want to be two to three steps ahead," said Energy Undersecretary Jay Layug. Apart from closely monitoring the supply situation, the Energy Department is also fine tuning other contingency measures such as possible allocation of supply and rationing of fuel directly to motorists. “If we need to cut back [on] allocation we will do that," Layug said. Libyan output has fallen to 700,000-750,000 barrels per day (bpd) as most foreign oil workers had taken flight, according to a Reuters report, citing Shokri Ghanem, thehead of the North African producer's state oil company. With Libya’s oil output already down, the Energy Department said that Saudi Arabia, the world's biggest exporter of crude, has stepped in to make up for the loss. — VS, GMA News