Oil, electricity price hikes loom

Oil prices are forecast to go up this week by as much as P0.60 per liter while the electricity prices in the franchise area of Manila will also likely go up in April due to higher demand.

“Expect fuel prices to go up next week (April 6 to 12). Diesel should increase by P0.60 per liter. Gasoline should increase by P0.05 to P0.10 per liter,” Unioil Philippines said in its weekly price forecast.

Optimism over the rollout of the COVID-19 vaccines in the US that would drive economic recovery helped boost oil prices in the market.

The decision of the Organization of Petroleum Exporting Countries and its allies of a gradual increase in quotas for the next three months also helped maintain oil price gains.

Last week, the oil companies cut pump prices by P1.20 per liter of gasoline, diesel by P1.30 per liter and kerosene by P1.35-P1.40 per liter effective March 28 to 30.

These resulted in the year-to-date adjustments to stand at a total net increase of P6.15 per liter of gasoline, P4.60 per liter of diesel and P3.50 per liter of kerosene.

Meanwhile, Meralco spokesman Joe Zaldarriaga said the peak demand in Luzon increased in March amid the higher temperatures.

“Based on early initial projections, there may be a higher generation charge for the month of April due to observed increase in the WESM (Wholesale Electricity Spot Market) prices. Luzon peak demand increased by more than 900 megawatts in March due to warmer temperatures and large capacities on outage persisted, remaining in excess of 3,400 megawatts on the average,” Zaldarriaga said.

Meralco sources a portion of its supply from the WESM, the country’s trading floor of electricity.

Zaldarriaga said the daily Luzon Load-Weighted Average Price at the WESM reached P8 per kilowatt hour during the week of March 1 and P9/per kWh during the week of March 15 compared to the daily LWAP of below P3 per kWh for most of February.

Zaldarriaga said March, however, marked the second straight month of downward adjustments for power rates as the overall rate for a typical household decreased by P0.3598 per kWh to P8.3195 from P8.6793 in February.

He said Meralco’s March rate was also the lowest since August 2017.

“Nevertheless, Meralco continues to encourage our customers to continue practicing energy efficiency initiatives at home to be ready in managing their consumption, as the summer season may bring an increase in residential electricity consumption by 10 percent to 40 percent versus the average consumption during the cool months of January and February,” Zaldarriaga said.

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