Kongreso nakipagpulong sa DOE hinggil sa patuloy na pagtaas ng produktong petrolyo
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00:00 We will now update you on the latest progress of the Congress and the Department of Energy
00:05 regarding the ongoing increase in the price of oil products in the country.
00:10 We will now have a meeting with the Oil Industry Management Bureau Director, Rino Abad, from the Department of Energy.
00:17 Director Abad, good afternoon.
00:20 Good afternoon, Joseph and Ma'am Pia. Good afternoon to our fellow countrymen.
00:28 Director Abad, as of now, how much is the total price of our oil products?
00:34 And will this ongoing increase of the price be valid until December?
00:39 Well, if we look at it, when our pump price relatively dropped,
00:48 around May of this year, our sample of gasoline, the common pump price is around Php 64 per liter.
00:57 It has increased to Php 71.
01:00 So there are already movements like that.
01:04 For diesel, we have around Php 52, common pump price.
01:10 Now it's around Php 64 to even higher.
01:14 We can already reach the range to even Php 70, to Php 68 to Php 70.
01:20 But that is relatively to what happened when the price dropped in May as to what the price is now this September.
01:31 Joseph.
01:32 Okay, sir. We have a question from our media partner, Bernadette Reyes of GMA News.
01:40 What is the reason why the price of oil is still increasing?
01:47 Aside from your daily explanations, sir, because I know that it's been months already,
01:54 the price of gasoline is said to be increasing.
01:57 Well, basically, this started in November 2022.
02:03 OPEC Plus suddenly declared that they will reduce the supply or production of around 3 million barrels per day.
02:14 Now, in April, of course, the big European central banks, US Federal Reserve, allied countries like here in Australia, here in our side, Japan, South Korea, implemented.
02:32 Next, there was a control on inflation, and they implemented interest hikes, the federal banks or the central banks.
02:46 The effect of that is to calm down the economic activity.
02:51 Unfortunately, when you do that, you also calm down the consumption of petroleum products.
03:01 And because of that, suddenly in April, OPEC Plus declared that in response to the, you know,
03:09 they think that the demand for fuel is going down, so they reduced the amount to around 1.66 million barrels.
03:17 That's already an increase of 3 million.
03:19 But of course, when we saw around May, the reports from McKinsey, from PLATS report, there is still an excess of 1 million that is seen between demand and supply.
03:37 So suddenly, in June, China and Russia also declared.
03:44 This time, it's just voluntary, OPEC Plus is not included.
03:49 They are just the two, they will reduce.
03:52 Starting July, China will have 1 million, and then, next August, and it's already this month, Russia added 500,000 barrels in August,
04:08 and then in September, it lowered it a little bit to 300,000 barrels.
04:13 So if you look at that, all in all, OPEC Plus reduced 3 million, 1.66 million, and then the voluntary of the two countries, Saudi and Russia, of an additional of 1.3 million.
04:25 What's worse, recently, their recent ministerial meeting in September, they said that they will not reduce it until September.
04:37 It will be directly to the end of the year.
04:40 So immediately after that, OPEC Oil Market Report, International Energy Agency Report,
04:54 they projected that by the end of the year, there will be a lack of daily production of oil, which will not be less than 500,000 barrels per day.
05:12 So that's what they expect, that by the end of this year, that's the lack.
05:17 So now, it's at the peak of the lack, that by August, it will reach 3 million barrels per day.
05:25 But the projection of the reports of the International Energy Agency, by the end of the year, it will be half a million.
05:33 So we are expecting a high price because of the tightness, remaining tightness towards the end of the year.
05:42 But if you look at the 3 million lack, it will reach 500,000, there is a backwardation.
05:50 It's still high because of the lack, but we are expecting a decrease in the price.
05:59 But still, we are still in the high prices because we are not expecting a decrease.
06:06 It's hard to say that it will decrease because there is still a lack.
06:10 Okay, Director. Follow-up question from Bernadette Reyes.
06:14 Monitor how was the first day of trading yesterday?
06:17 Well, as compared to the average of last year, the news is good.
06:26 It's showing that it's decreasing compared to last year.
06:31 The price is decreasing.
06:33 In fact, we are already seeing a decline, resulting to an estimate of a rollback.
06:44 But this is only one day, so we are not sure.
06:51 The sample in gasoline was 111 last week.
06:55 We are now going down to almost 110.
07:00 So that's a good sign if this will go straight to the end of the week.
07:05 So let's look at the whole week, what will be the trend of the daily trading price of petroleum products.
07:16 Director Abad, what did you talk about yesterday with the help of the House leaders,
07:23 the Department of Energy, and the continued increase in the price of petroleum products in the country?
07:30 Ma'am Nina, definitely, we talked to the center.
07:34 Of course, they're expecting from the same report that I'm reporting,
07:39 they will be expecting that this will continue to the end of the year.
07:43 So the critical thing is that it's in the center for the next few months.
07:47 Our speaker said that I hope there will be ways and means on how to,
07:55 I've mentioned means because there is an angle of the government side there.
08:00 So the ways to mitigate in the private sector, in oil companies,
08:05 they are looking for suggestions on their part on how to help in lowering the price.
08:14 On the government side, I'm talking about the controlled component of the price,
08:20 which is basically the taxes.
08:22 Unfortunately, the taxes that we're talking about are still pending, there's no decision yet.
08:28 So it's just there now, and we're still talking about it.
08:33 Even not in the plenary, but in the core group of the speaker.
08:39 So we don't have any comment to add on that because it's still pending, there's no decision yet.
08:44 Now, on the oil players, initially, they said that there are promo programs, there are discount programs.
08:51 So because of that, that's what will continue.
08:55 The speaker suggested that there will be another meeting, a series of meetings,
09:01 maybe it will come.
09:03 But this time, it seems that the speaker will face the principals, the owners, the presidents themselves.
09:13 Because really, these things will have to be decided by the top management.
09:19 So it seems that there will be another meeting,
09:23 and ultimately, the decision maker from the side of the oil companies will face the Congress
09:31 so that a decision can be resolved.
09:35 So there was no decision yesterday, this was an initial meeting.
09:40 Congress brought their desire to provide some mitigating measures,
09:49 but ultimately, it will be faced again and the decision makers from the side of the oil companies will decide.
09:57 Okay. Sir, what can the DOE say about suspending the excise tax on oil products?
10:07 Again, that's pending with Congress, but I would try to explain for our countrymen.
10:15 If you suspend that, definitely, there will be no revenue stream.
10:22 The average, if I'm not mistaken, before this, there was a report in Congress also,
10:29 during one of the hearings, that the collection of the government way back in 2021, if I'm not mistaken,
10:37 is around P150 billion excise tax from petroleum products.
10:42 So again, if we will monthly that, that will be around P15 billion.
10:47 If we will say, we will go back to economic activity, around P15 to P20 billion a month.
10:54 So if you look at the suspensions for three months, October, November, December,
11:00 three times 15, that will be around 45.
11:03 If that's 20, the higher rates, that will be around 60.
11:07 So from 45 to 60, we might expect that the government will lose its revenue stream.
11:13 So that's the only implication.
11:17 I think it's really a very critical and sensitive issue that definitely the Congress has to decide ultimately
11:27 if there will be a suspension on excise tax.
11:31 Okay, sir. But you said it's good that you will give a discount to our big oil companies.
11:40 I think they have already earned a lot from that and I hope we can help each other.
11:47 So, Yusec, maybe you can just message our…
11:52 Oh, wait sir, we have a follow-up question.
11:55 It's really about petroleum.
11:58 We have a question from a member of our media who is watching right now.
12:07 So let's wait.
12:10 There's a question from…
12:13 Wait, it's gone.
12:15 It's not complete.
12:17 Okay, so this is it.
12:21 What is the implication from Tuesday New…
12:28 It's gone again.
12:30 Maybe the Director can just message our fellow countrymen.
12:34 Okay, so this is it.
12:37 Will the price still rise until December?
12:42 Sir, please say it so that we won't be…
12:45 We'll be surprised.
12:46 Yes, so that we'll know.
12:49 Well, yes, Ma'am Nina, Yusec, what I said is based on our monitoring of the supply, demand, balance, projection of PLATS,
13:00 we can say that there is an increase now.
13:03 It started in August at 3 million, but by December, their projection will reach 500,000.
13:12 So, the price has risen.
13:14 Definitely, we won't be going back to the March level, to the May level,
13:21 when Dubai Crude was at 77 US dollars.
13:25 Now, it's at 91.
13:27 Definitely, we won't expect that it will go back to 70 US dollars.
13:31 That's the equivalent of the price of gasoline, as I said earlier,
13:36 we were at 71 before, it's at 64, 60 to 64 per liter.
13:42 So, definitely, we won't be able to go back.
13:45 It's hard to say that we'll be able to go back to that level, where the per liter of gasoline is only 60 to 64.
13:53 We'll be at that level of gasoline, 71 to 73.
13:58 Okay, so the question is, will it continue to rise?
14:02 Again, there is a backwardation.
14:05 It's possible that it will rise, but not to such an intensity that it will just rise.
14:13 That's because of the connection, as I said, the gap of deficiency is getting smaller.
14:20 Again, we don't even discount the fact that the price might saturate.
14:25 If you remember, last year, June-July of 2022,
14:33 that was the peak month of the prices, the effect of Ukraine-Russia, June-July.
14:40 But later on, when August to December of last year came, we saw that the price went down.
14:46 Nothing changed in the Ukraine-Russia conflict.
14:50 The effect also has saturation.
14:53 So, in short, as the price kept rising, the crude oil price reached more than 100 US dollars per barrel at that time, 114.
15:06 Ultimately, the demand had a distraction.
15:10 The demand was too high, it was declining.
15:13 We just don't know in this case, in October or November, if that will happen.
15:18 But definitely, what is very clear is the gap is getting smaller.
15:23 So, we will not expect a high intensity like what happened from April up to now.
15:31 It's really rising, it's increasing.
15:33 As I said, we are already increasing 11 times or 11 weeks.
15:38 So, that's it. But it will still rise until December.
15:43 We are not sure if the intensity will be that high.
15:46 It will still be increasing.
15:47 Maybe there will be a rollback.
15:51 But it will still be at the level of a bit high, which is around 90 US dollars per barrel.
16:01 Okay. Thank you very much for your time and information.
16:07 Oil Industry Management Bureau Director, Rino Abad from the Department of Energy.
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