Oil companies increased pump prices to P4 per liter on Tuesday, which means gasoline will be sold at P69 to P72 and diesel from P57 to P59 in Metro Manila.

This came as the prices of gasoline increased by P2.10  per liter while diesel rose by P3.50 per liter.

In a “Laging Handa” briefing Tuesday,  Oil Industry Management Bureau Director Rino Abad said oil prices outside Metro Manila may be higher due to logistical costs.

Abad said oil price hikes were due to some Organization of the Petroleum Exporting Countries (OPEC) Plus member countries reducing their oil production.

“Saudi Arabia committed to reducing its supply by one million barrels of production per day. We saw that there was a supply-demand balance in June 2023 because there was an excess of around one million barrels. Coincidentally, Saudi Arabia removed that oversupply,” he said.

“But what aggravated the situation this August is that Saudi Arabia continues to fulfill that commitment and they may keep doing that until September. Russia added 500,000 barrels for this month and 300,000 barrels for September,” he added.

“If this reduction of 1.5 million barrels happens this August, there will be a shortage in the daily production but not in the market…So the cause of the rise in oil prices is because of the insufficient daily production of oil versus the demand,” Abad said.

He said the average global demand was 101 million barrels per day, which means the supply will be around 99.5 million barrels per day.

Last Tuesday,

Jaspearl Tan