Due to the geopolitical disputes between major oil-producing countries, chances or price reductions in oil seem nill.
Political analyst Alex Magno said that the $80 crude oil hike could mean “pain at the pumps the next few weeks.”
Magno said that President Donald Trump’s withdrawal from the nuclear deal with Iran could block of the country’s oil exports, limiting supply and thus boosting prices.
He also said that OPEC countries could be raising global prices on purpose.
“The oil-producers are winning the game by voluntarily limiting supply and choking supply,” Magno said.
A higher oil importation bill will likewise exert pressure on the peso’s exchange rate. The Philippines does not have a strong export sector and therefore we have little to offset what we pay out for oil.
“This leads to a vicious cycle: a wider trade deficit will push the peso downward as a weaker peso pushes inflation upward,” Magno said.
The country’s oil industry has yet to react and adjust to the crude oil hike, and price inflations are yet to be announced.