DOF: Govt. concerned, but “ready” for drastic oil price hike

carlos dominguez

The government is concerned that oil prices may be hitting $100 per barrel soon, but says it’s “ready,” according to Finance Sec. Carlos Dominguez III.

In an interview with CNBC on Friday, Dominguez said that based on estimates at $95 per barrel, the government’s economic managers are confident in meeting their inflation targets – referring to the two to four percent price hikes that were deemed manageable and conducive to economic recovery. 

While the high global oil prices are concerning, especially for an importing country like the Philippines, Dominguez is hopeful that factors affecting the continuous increase in oil prices – like the conflict between Russia and Ukraine – would start easing up.

As of Monday night Manila time, the price of crude oil in the world market stood at $91.85 a barrel. 

Locally, pump prices are expected to increase for the eighth straight week this year this Tuesday with gasoline going up by Php0.80 per liter, diesel by Php0.65/liter, and kerosene by Php0.45/liter.

The Monetary Board, the Bangko Sentral ng Pilipinas’ highest policy-making body, is carefully watching the trends of interest rates from a global perspective. 

Gearing up for possible oil supply disruptions in the country, the Department of Energy (DOE) is looking to partner up with the Japan Oil, Gas, and Metals National Corporation (JOGMEC) to conduct a feasibility study that could help materialize the department’s proposed strategic petroleum reserve (SPR). 

JOGMEC is the Japanese counterpart of the Philippine National Oil Company, a DOE-attached firm.

In a report by the Manila Bulletin, DOE Oil Industry Management Bureau Director Rino Abad said that the plan of engaging with the Japanese firms came after PNOC’s initiative to tap in a consultant for the SPR feasibility study did not materialize. 

Abad said that the government has not had any concrete idea on what would be the appropriate strategic oil reserve for the country – which is why the DOE would like to partner up with Japan, a country that has its own SPR.

The DOE earlier mentioned that it is preparing a contingency plan to assure enough supply in the country.