Fuel prices for the first week of September will be cut by 30 centavos per liter for gasoline, and around 3.8 pesos per liter for diesel, according to SeaOil.
Middle East Conflict: Dampening
This comes after the relaxation of the harsh stance of the U.S. on the Middle Eastern conflict; where the war had caused gas—and energy prices—to soar globally. Though the effect is not equal: other countries are more insulated from the crisis. Yet the Philippines, where its oil reserves are comparatively lower than other ASEAN countries, is less insulated from the impact of the conflict. From the previous weeks, it was observed that fuel prices prescribed by the Department of Energy (DOE) had risen to 75 pesos for gasoline, and 90 pesos for diesel. Following SeaOil’s announcement, diesel can drop to around 86 pesos per liter—a 4.44% decrease in prices. As of the time of this writing, there are no official statements yet from the Department of Energy as to the prescribed ‘pump prices’ for diesel and gasoline. Thus, the extent to which the fall of prices cannot yet be accurately measured.
SeaOil, a major player in the fuel sector, accounts for 8% of the market—the third largest brand. And with SeaOil’s preemptive announcement of slashing prices, other players like Shell and Petron might follow suit. This logic follows with the competitiveness of fuel brands as they position themselves to jockeying for market share vis-a-vis market prices and branding placement; where historically, the fluctuation of prices is closely followed and adhered to by key players in the energy sector.
Lower fuel prices, Lower energy costs?
The lowering of fuel prices may also be followed by the lowering of other energy costs for consumers—most notably, electricity. Last week, the price per kilowatt hour (KwH) of electricity hovered around 14.8 pesos; coming from January’s cost of 12.95 pesos. Although the percentage difference announced by SeaOil is not definitely indicative that electricity will be slashed to January’s levels, consumers should expect at least a slight lowering of electricity costs for September.
Fuel prices, Vehicle sales, and Savings
Fuel has almost always been an inelastic supply—where prices rise; demand still follows, and the same is said with fluctuations. This is because fuel is a necessity for most motorists; but as the oil crisis persists, and the fuel price remains high, there has been a notable shift towards alternative means of transportation. For the motorist, these are electric vehicles. Fuel-powered cars have seen a decrease of around 2-3% in sales, yet electric vehicle sales have remained stable (and have even risen a little). Rising EV sales reflects consumer intolerance to rising fuel prices. Using an example of last week’s prices, a diesel-powered car with a 70-liter fuel tank costs 6,300 pesos to fill up, whereas a similarly ranged electric vehicle (say, of 80 kilowatts), costs 1,184 pesos to charge. Slashing the price of diesel by 3.8 pesos per liter brings down the example cost by 266 pesos—which is not an insignificant saving.
This 266-peso figure is a meal, or a day of electricity; it could be a day of commute. All this is to say that 266 pesos is a relevant saving that most motorists will be pleased by.
DOPAY: Savings passed down to the consumer
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The saving passed down to DOPAY’s users reflects our mission to revolutionize financial technology by being a blockchain-enabled platform. Beyond the savings, are security, immutability of information, and a dedicated support line that puts you first.
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